Increased revenue from the fast-growing tourism industry, a low interest rates scenario and rising consumer confidence will remain major drivers for Malaysia’s growth.
This is despite the bleak outlook, particularly in Europe over the next several years, from which export-oriented Asean economies might not be spared.
These supportive factors will help Malaysia, which grew by 5.6% last year, to maintain relatively commendable growth rates of 4.3% this year, 4.4 in 2014 and 4.6 in 2015.
“Malaysia will continue to outperform the global economy which is good news,” said Mark Billington, the regional director of the Institute of Chartered Accountants in England and Wales (ICAEW).
He said the low interest rates in Malaysia was also supporting private sector investment and increasing consumer confidence.
The country’s key interest rate has remained at 3%.
“ The good news for Malaysia at the moment is that low inflation means there is little pressure to raise interest rates, making investment attractive,” he told Bernama.
“One key to attracting global investment will be in ensuring transparency and global comparability in financial services, which in turn underpins business and market confidence,” said Billington.
He said Malaysia was likely to meet its aim of becoming a high income economy by 2020 but would have to meet certain pre-requisites such as increasingly moving towards a knowledge and skills-based economy and maximising the focus on service provision rather than manufacturing.
“It also means attracting global businesses” and making Malaysia a top investment and business location through greater transparency, strong corporate governance as well as ease of doing business.
“If Malaysia has the right skills pool, it can become a global or regional economic hub” which means it would compete with its close neighbours by attracting the right kind of talent and industries.
“This means, being a competitive place to locate a business and an attractive place for workers to re-locate to and build a career in,” he said, adding that main barriers to Malaysia achieving its aspirations are the lack of the right skills and knowledge in the workforce as well as bureaucracy.
“Growing the talent pool is not necessarily the problem as Malaysia’s young people are bright, adaptable and hardworking. But what remains the challenge is retaining what it currently has,” he added.
In this regard he said, professionals, educational bodies, and businesses all need to work together.
“This is to ensure that young people are not only trained with the right skills, but also given the option of a rewarding career, to eventually choose to stay in Malaysia,” he added.
Billington highlighted that red tape is a barrier to investment - both for local and foreign direct investments (FDIs)- and hence should be cut at every opportunity.
“Tackling these barriers gives Malaysia its best shot at attracting global businesses and investments that will support its aims,” he added.