Malaysia’s gross domestic product (GDP) is forecast to grow to 7.2% in 2022, driven in part by a recovering tourism sector which is projected to recover to more than 30% of pre – pandemic levels in 2022 and top the ASEAN region with more than 70% sector recovery anticipated in 2023.
The Institute of Chartered Accountants in England and Wales (ICAEW) said Malaysia is cushioned from the rising oil prices resulting from the Russia-Ukraine war as it is a net oil exporter along with liquefied natural gas (LNG), which means higher export revenues for Malaysia.
The fuel subsidies implemented by the government also helps to keep consumer petrol prices in check and on top of its food protectionist measures, the impact of higher commodity and oil prices on Malaysia is negative, it added.
“However, due to its lockdown measures last year from the Delta variant and high dependency on exports to China, it is expected to have a GDP growth of between 1.0% and 1.5% lower this year than otherwise,” said ICAEW in a statement today.
Meanwhile, Southeast Asia is facing a severe manpower crunch as a result of the pandemic and for decades, Malaysia has benefited from cheap foreign labour and currently, two of the most impacted industries are retail and commodities.
ICAEW Fellow Chartered accountant Rafizi Ramli said Malaysia has no choice but to find out how to use technology, digitalisation and optimisation to move away from that reliance on foreign manpower and automate more.
“Although retail is evolving quickly due to market demand, more traditional industries like commodities require a lot of innovation, for example research and development into robotics and logistics.
“Hopefully what we have learnt during the pandemic will close market hurdles and we will see better adoption in the next one or two years,” he added.
Rafizi believed the ASEAN region missed out on the opportunity to promote digital awareness created by the pandemic and will subsequently lack an integral building block in digitisation, namely reskilling.
He pointed out that there was a mismatch between how institutions and even the job market were dealing with reskilling and although there was demand for tech related jobs in Malaysia, it is also getting increasingly difficult to get access to those talents and reskilling.
“For example, demand for software engineers is definitely on the rise. However, at least in Malaysia, Singapore and Indonesia, there is a shortage in supply.
“These three countries need to figure out how to balance this because in the case of Malaysia for example, supply cannot keep up with demand. A lot of investments which could have come to this region will be going to China or India if we don’t address this issue,” he opined.