The country is already on a positive track, with the government likely beating last year’s deficit target of 4.3% of the gross domestic product (GDP), Amir said in an interview with Bloomberg Television’s Haslinda Amin. The government plans to narrow the gap further to 3.8% of GDP this year.
“We have a good base because foreign direct investments remain strong and a lot of activity that’s generated is now playing out through the economy.
“We are confident that we’ll have a good year,” Amir said in the administrative capital late on Wednesday.
Restoring fiscal health is key for Malaysia to retain emerging Southeast Asia’s highest credit score as Prime Minister Anwar Ibrahim’s government restores political stability and drives the nation’s economic resurgence.
Officials previously said they expect GDP to grow by about 4.5% to 5.5% this year, largely exceeding the 4.7% expansion predicted by analysts surveyed by Bloomberg.
Government-linked investment companies, which manage almost RM2 trillion (US$444 billion) in assets combined, have also boosted their direct investments in the economy, contributing to growth, Amir said.
“Traditionally GLICs will invest, plus or minus, nearly half a trillion ringgit over a five-year period,” he said.
“They’re boosting it up by another RM120 billion over a five-year period, so that’s a fairly significant step up.”
Higher salaries for civil servants and plans to increase the minimum wage in the private sector are also poised to boost domestic demand.
The strength of the economy and foreign direct investments will continue to support the ringgit, Amir said.
“Imports are measured, exports are growing still, and supportive mechanisms allow us better tools to use to cushion blows,” he said.
The ringgit was the best performer across emerging markets in 2024. It strengthened 2.7% against the dollar, ending three consecutive years of declines.
Amir said he was confident that the nation’s diversified economy would withstand the threat of Donald Trump’s tariffs and the trade wars that have rattled developing-nation assets.
“Despite the choppiness in the global market, where we are today, I think we’ve got enough resilience to ride it through,” Amir said.