Apurva said Malaysia could even become a high-income nation a year earlier if the ringgit’s performance remains at its current level, Bernama reported.

He said this forecast is assuming an average growth rate of 4.3% and a US dollar-to-ringgit exchange rate of 4.54.

“If the US dollar and ringgit exchange rate stays at the current level of about 4.20, then the high income goal (could be reached) a year earlier in 2027,” he said, adding that the high-income status differs from the high development status with inherent risk of economic reversal.

The World Bank also upgraded its forecast of the nation’s gross domestic product growth for 2024 to 4.9%, from its initial projection of 4.3%.

Apurva attributed this upgrade to both domestic and external factors, citing improved global economic conditions compared to six months ago.

On the domestic front, he said the positive economic momentum, rising political stability, and an increasingly conducive policy environment that boosts and mobilises more investments, have contributed to the revised growth projection.

“Global growth is expected to stabilise at around 2.6% this year, despite ongoing geopolitical tensions and high interest rates, while inflation is receding, so there is a new appetite for growth especially in advanced economies,” he said.

“In emerging markets in general, (there are) positive trends in consumer confidence, manufacturing and services.”

Apurva also pointed out that Malaysia’s per capita output growth is currently 12% higher than pre-Covid-19 pandemic levels, outperforming its neighbours in Southeast Asia.

On the possibility of subsidy rationalisation for RON95 petrol, Apurva said its success would depend on three things: timing, price level, and narrative.

“Timing in particular (with) what is happening right now – geopolitical tensions that are already beginning to increase; price level is to make the subsidy rationalisation gradually; and, very importantly, the narrative for the RON95 reform.”