Economic Views

Ringgit realignment (Part 2): Prioritising the current account balance and foreign investments

In this multi-part series, we dissect drivers of currency phenomena, including: i) interest rate perceptions, ii) current account intricacies and the real economy, iii) capital flow dynamics in the financial account, and iv) money supply theories in relation to debt levels and the fiscal position. In this second part, we discuss the influence of the …

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Ringgit realignment (Part 1): Interest rates and currency perceptions

In this multi-part series of press announcements, we dissect drivers of currency phenomena, including: i) interest rate perceptions, ii) current account intricacies and the real economy, iii) capital flow dynamics in the financial account, and iv) money supply theories in relation to debt levels and the fiscal position. In this first part, we discuss the …

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Effective management of expectations crucial to attract global portfolio investment flows, strengthen ringgit and improve market outcomes

Global investors closely monitor Malaysia’s national plans, which play a crucial role in attracting portfolio flows and influencing financial market outcomes, including the strength of the Malaysian ringgit. These plans provide essential information regarding Malaysia’s country risk and sovereign credit risk, shaping global investors’ perceptions of financial market valuations, particularly portfolio flows in the equity …

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Gains in productivity and education are integral to wage policies

A country’s economic competitiveness hinges on a solid foundation of quality human capital. The MADANI “Empowering the People” economic framework anchors the government’s commitment to human capital development with measurable goals, including positioning Malaysia in the top 12 of the Global Competitiveness Index (2023: 27th) and top 25 of the Human Development Index (HDI) (2021: …

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Crude palm oil outlook: MARC Ratings forecasts slightly positive trend

The palm oil market is expected to show a slightly positive price trend going into 2024. Crude palm oil futures prices for the remainder of the year and into 2024 are projected to range between RM3,700/metric tonne (MT) and RM4,100/MT. The edible oils market is currently recovering from the substantial selling pressures witnessed in sunflower …

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MARC Ratings releases forecasts of key monetary variables: A cautiously optimistic 2024 outlook

The global interest rates outlook is at a crossroads following aggressive monetary policy tightening in advanced economies. The nascent global economic recovery has been uneven thus far, with a confluence of factors shaping the economic landscape and adding uncertainties to the global and domestic interest rate outlook. This includes persistently elevated inflation in the advanced …

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Oil price outlook: MARC Ratings anticipates higher prices

The worldwide energy landscape is currently experiencing a complex interplay of factors that are shaping the oil market’s near-term price outlook. Amid ongoing geopolitical conflicts in Eastern Europe and the Middle East, supply disruptions, expectations of steady global gross domestic product (GDP) growth in 2024, and the persistence of medium-term oil dependency despite evolving environmental …

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Budget 2024: Reforms on the horizon, further fiscal consolidation would be beneficial

On October 13, 2023, the Malaysian government tabled its Budget for 2024, the largest on record with an allocation of RM393.8 billion (Budget 2023: RM388.1 billion), albeit slightly lower than the spending amount for 2023 estimated at RM397.1 billion. The government has allocated for a higher operating expenditure of RM303.8 billion (2023 estimate: RM300.1 billion), …

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Recommendations on Malaysia’s ongoing development of wage policies

Malaysia continues to maintain its policy commitment to worker welfare, through its ongoing review of wage policies. In July 2023, Malaysia increased the minimum wage from RM1,200 to RM1,500, extending its applicability to micro-enterprises with a staff size of less than five. The minimum wage of RM1,500 was already in effect since May 2022 for …

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