It a statement today, he said such pessimism was understandable as Malaysia was not immune to these events.
He said the FTSE Bursa Malaysia Kuala Lumpur Composite Index is one of the best performers in the Asia-Pacific region year-to-date with a slight increase of 0.13% as of Sept 7.
This is in comparison with the 8.29% decrease in the Singapore Straits Times Index and 1.72% drop in the Nikkei 225 index over the same period, he added.
He attributed the strength of Malaysian’s economy to eight factors.
The first was steady growth driven by both domestic and external demand. “With the growth in 2018 expected to be around 5%, Malaysia will still be one of the fastest growing economies in the region.”
The second factor was attributed to a highly-diversified economy where services account for 54.5% of gross domestic product (GDP).
The third factor was the low unemployment rate of 3.4% in July 2018 and wage growth within the private sector.
“Our exports are likewise diverse, with manufacturing exports accounting for more than 80% of our total exports.”
The fourth factor was because the government continues to have a healthy current account surplus, at 2.8% of gross national income (GNI).
Lim said the fifth factor was the flexible exchange rate, with the ringgit evolving since the Asian Financial Crisis to become a fully flexible and floating currency.
“It is one of the best-performing currencies in Asia. Having this flexibility is an advantage as it allows the ringgit to play its role as a shock absorber during times of stress.
“Nevertheless, it is highly important for businesses to recognise that exchange rate adjustments are unavoidable and they must be ready to manage their currency exposures prudently.
“In the medium-term, as the government continues to improve economic fundamentals, the ringgit will eventually reflect these positive developments.”
Another factor is linked to the country’s ability to have sufficient external buffers, with international reserves at US$104.4 billion. Banks and corporations also hold Malaysia’s external assets, which were at RM1.3 trillion at the end of the second quarter of 2018.
The seventh factor is the low inflation rate of 0.8% in June and 1.1% in July. Malaysia has been largely shielded from any imported inflation caused by the decline of the ringgit against the US dollar.
The eighth factor is the trade conflict between China and the United States which has also created a unique investment opportunity for Malaysia.
“The tariff wars between the two largest economies of the world has resulted in many companies, particularly large manufacturers — both from US and China — seeking to site their plants and factories in Malaysia, which is seen as a natural safe investment harbour,” Lim said.
The minister further said the 1MDB scandal had resulted in Malaysia suffering a RM1 trillion debt.
“We are determined to put in all necessary measures to ensure that corruption and abuse of power is eradicated from our administrative system.
“With Malaysia’s strong economic fundamentals, good governance and fiscal responsibility, the only way to go is up.”