00:00Malaysia's latest leading indicators performance suggests further improvement of the overall
00:10economy.
00:11With the forthcoming performance, the year-to-date growth is strong at 5.2 percent, and this
00:16is well within our projection of between 4.8 to 5.3 percent.
00:22And moving into 2025, we expect growth to expand between 4.5 to 5.5 percent.
00:29And this is supported by household spending, which will remain the anchor of growth, driven
00:35by expansion in employment and income, as well as continued policy support.
00:41Furthermore, investment activities will continue to support growth amid the ongoing progress
00:47in multi-year projects, realization of the high approved investments, and the favorable
00:53financing conditions.
00:56And on the external front, higher exports and tourist spending will also continue to
01:00lift growth.
01:02The growth outlook, however, remains subject to risks from both external and domestic factors.
01:08Downside risks could stem from weaker-than-expected external demand from key export partners,
01:14further escalation of geopolitical conflicts and more protectionist policies, as well as
01:21lower-than-expected commodity production.
01:24On the other hand, growth could be higher due to greater spillovers from the global
01:29technology up-cycle and more robust tourism industry.
01:34In addition, a faster implementation of existing and new investment projects could also lead
01:41to more robust investment activity and the overall growth in the economy.
01:47Malaysia's trade performance in the third quarter remains highly encouraging.
01:51Cross-exports grew by 7.8%, and this is driven by continued external demand and the global
01:57tech up-cycle.
01:58These are evident from the sustained growth of E&E and non-E&E exports by 5.2% and 10%
02:06respectively.
02:07And we project export growth to sustain, arising from the global tech up-cycle and the continued
02:13strong demand for our non-E&E goods.
02:17At the same time, cross-imports expanded at a faster rate of 20.8%, contributed by increased
02:24imports of capital and intermediate goods.
02:28Going forward, we expect imports to remain strong, and this is driven by capital imports
02:32from investment up-cycle and intermediate imports to support higher exports in the future.
02:39Importantly, these investments will further raise exports and expand the productive capacity
02:45of the economy.
02:47Consumer spending remains as the anchor of growth, and this is supported by the continued
02:51wage increases and employment growth.
02:54Moving forward, household spending is projected to remain resilient, lifted by rising income,
03:01expanding employment opportunities, along with targeted policy initiatives to support
03:06selected households.
03:08The investment up-cycle is a key bright spot in the economy.
03:12Overall investment registered a higher growth of 15.3%, if you look at the second quarter
03:17this year at 15.5%, and this is supported by both structures and machinery and equipment.
03:25The continued implementation of new and existing projects is reflected in higher construction
03:31activities, mainly in the private sector during the quarter.
03:36Investments are also supported by the good implementation progress of key infrastructure
03:41projects such as the ECRL and the PEN-Bonyo Highway.
03:46To further support investment activity, I am pleased to announce the globalisation of
03:51the foreign exchange policy to better facilitate greater participation from global investors
03:57in key growth areas in Malaysia.
04:01And this is in line with the greater demand and interest by international financial institutions
04:06to finance the high-value investment projects in Malaysia that we have observed in the
04:11recent period.
04:14With the globalisation, multilateral development banks and qualified non-resident development
04:19financial institutions are now free to issue Ringgit-denominated bonds and sukuk for use
04:25in Malaysia and to provide Ringgit financing to resident entities.
04:31Now let me turn to inflation.
04:35Malaysia's headline and core inflation remained stable at 1.9% in the third quarter.
04:41While there were pockets of higher inflation for selected items such as diesel and vehicle
04:46insurance, this was offset by broader moderation for food and beverages inflation during the
04:52quarter.
04:54Of note, the stable underlying inflation during the quarter continues to suggest limited spillover
05:00to broader prices from the diesel subsidy rationalisation that was implemented in June,
05:05which we largely attribute to effective enforcement and mitigation measures to minimise the cost
05:11impact on businesses.
05:14Year-to-date, both headline and core inflation averaged 1.8% and are expected to remain a
05:20modus for the remainder of the year.
05:23For 2025, inflation is projected to average between 2% to 3.5%, accounting for impending
05:30domestic policy measures announced in Budget 2025, including the implementation of targeted
05:36RON95 subsidies and the expanded scope of the SST.
05:41Upside risk to the outlook remains contingent on the extent of spillovers from further domestic
05:47policy measures to the broader prices, as well as lingering risk from external developments
05:53which could drive up global commodity prices or disrupt global supply conditions.
05:59On the downside, lower domestic inflation could result from the weaker-than-expected
06:05global growth, which could weigh on global commodity prices and domestic economic conditions
06:11through weaker external demand.
06:14The banking system continued to play an important role in supporting economic growth during
06:18the quarter.
06:19Owing to their strong financial position, including the robust levels of capital and
06:25healthy liquidity buffers, banks remain well-positioned to support the financing needs of the domestic
06:31economy.
06:32In summary, the Malaysian economy expanded by 5.3% in Q3 of this year, driven mainly
06:40by stronger private expenditure and further recovery in exports.
06:47Growth prospects in 2025 remain positive, although there are risks to the outlook from
06:53both the external and domestic factors.
06:56Meanwhile, headline inflation is expected to average between 2% and 3.5% in 2025.
07:04And with that, my team and I, as well as Dr. Uzey and his team, will be happy to take questions
07:10from the media.
07:11Thank you very much.
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