The World Bank has just announced today that Malaysia is on track to achieve high-income status, highlighting the country’s impressive economic growth and ongoing development efforts toward reaching this milestone.
According to Bernama‘s reports, the Bank’s lead economist for Malaysia, Apurva Sanghi, said the country could even reach this milestone a year earlier if the ringgit keeps performing well.
“High-income status is within reach”
Apurva also noted that based on their projection of the US dollar to ringgit exchange rate at 4.54 and an average growth rate of 4.3%, Malaysia can expect to reach high-income status by 2028.
“If the US dollar to ringgit rate stays around 4.20, this goal could be achieved by 2027.”
However, he pointed out that despite Malaysia reaching high-income status, this doesn’t mean it’s also highly developed, and he warned about the risk of backtracking.
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Key factors that boost investor confidence
Apurva mentioned that the recent strength of the ringgit is thanks to better investor sentiment, which has been boosted by 3 main factors.
These include a loosening of US monetary policy, stronger domestic economic data in the second quarter, and some major reforms that the government has put in place.
“These factors have really played a role in boosting investor confidence and ramped up demand for the ringgit,” he added.
“A new appetite for growth”
Apurva also mentioned that the government’s targeted initiatives and Bank Negara Malaysia’s efforts to bring back funds and improve how the currency market works have given the ringgit even more support.
Globally, growth is expected to stabilise at around 2.6% this year, even with the ongoing geopolitical tensions and high interest rates.
“Malaysia is in a great spot. In emerging markets overall, we’re seeing good trends in consumer confidence, manufacturing, and services.”
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Also read: Singapore Finance Expert Predicts MYR May Hit RM3 Against SGD by Next Year!
