00:00You said before that you think the impact would be a pretty short-term impact, given
00:05that we're into the seventh day, and given that Iran has said it wants to up the empty,
00:11do you still maintain that view?
00:13I think if you look at what we've been through for the last year and a half, we've been
00:17through a lot from a global perspective, right?
00:19And the world has been a lot more resilient than what people anticipated to be, which
00:24is why I think the immediate impact on the market has been a lot milder than what people
00:29have seen.
00:29And I think it's giving us an opportunity to wait and explore what the challenges are,
00:35and then figuring out how to manage through these events along the way.
00:39Cannot put the possibility that this won't be a prolonged challenge, and I think countries
00:45need to prepare for that.
00:47But we all live in a world that is very different than we were maybe five, ten years ago.
00:52Supply chains are differently configured, reliance on trade is a lot different than what we were
00:57in the past.
00:58So, you're referring to the buffers that countries have, and you seem confident that
01:03Malaysia has the buffer to last for how long?
01:05No, I think if you look at what we've been in our journey for the last three years, we've
01:09been bringing back fiscal discipline, and we've been doing a lot of subsidiary rationalisation
01:14and creating spaces along that way, and then also putting money back in the hands of the citizens.
01:20And that's creating a very, very strong domestic market that's actually supported, and also
01:24engaging our government-linked investment companies, government companies, to also focus
01:29about domestic investments.
01:31And that's how it builds the buffer that you need to create a robust domestic economy.
01:37And as we were successful in bringing FDI, the other engines of growth has helped us
01:43to ride through a lot of changes.
01:45But, Minister, how long will your buffer last?
01:47If Trump is right, four to five weeks, that's okay.
01:52But some say three to six months.
01:54No, I think if you look from an energy supply base, I think we are in a very reasonable shape.
01:59Malaysia is a net energy supplier in a global horizon.
02:03And from our energy mix in the country also, we have a lot of dependence on gas, which you
02:09produce a lot of the way.
02:10So, I think that part of the supply chain is in a fairly decent shape.
02:15And again, as we talk about what do you do from creating engines of growth within the economy,
02:20domestic economy plays an important part.
02:23And if you can continue to do that, then you create a bit more resilience than what you would
02:29have in the past.
02:30So, growth projection intact, ringgit projection intact.
02:35Because just a month ago, you said that you expect the ringgit to continue to rise,
02:39and you expect GDP to also be better.
02:42No, if you look at what we were a month ago, we didn't have the Middle East crisis, right?
02:47However, when the end-of-the-year results came in for the fourth quarter, we were a lot
02:52better than what we anticipated it to be.
02:54So, that tailwind has actually continued to support and continue to power the economy forward.
03:01So, I think within the range of focus that we've alluded to, I think we're in a safe zone.
03:07Whether we have room to grow against that, we'll just have to wait and see how this pans out
03:13with the Middle East crisis that's going on at this point in time.
03:17The message I'm getting from you is that this is a very resilient economy, yet the ringgit was among the
03:24hardest hit in Asia.
03:26Why do you think that is so?
03:27Isn't that evidence of vulnerability?
03:29I wouldn't say hard to sit.
03:32So, if you look at, you asked me last year, would the ringgit cross four?
03:36We've crossed four, yeah, to the dollar.
03:39And this year, we're still up nearly 3% year-to-date.
03:43So, I think the resilience of the ringgit still remains because we see a lot of inflows still holding at
03:49this point in time.
03:49How much upside for the currency if that resilience continues?
03:53I think your colleague interviewed me about three weeks ago. I've not taken out my crystal ball and actually do
03:59it.
04:00Take out the crystal ball.
04:01No, no, no. I think it's important that we allow the developments to actually work through the system, and we'll
04:07see.
04:08But I think the ringgit's movements are not only dependent on this crisis, but also the fundamentals that the economy
04:15is displaying.
04:16As long as the economy has the resilience, I think it will provide support for the ringgit.
04:21But it is a stronger dollar environment. We know investors are, you know, gravitating towards traditional havens.
04:29And we're seeing an unraveling, so to speak, of Asian, particularly Southeast Asian currencies.
04:35Is there a reason to be concerned? I mean, it could be a case where the ringgit gets dragged down
04:40along with the other currencies.
04:41Like I said, the ringgit held its ground. Again, it still remains below four. And year-to-date, it's still
04:50up nearly 3%.
04:51So again, look at the fundamentals. And the fundamentals go back to where is investments coming in?
04:57Is the projects that have been brought in being converted? Is it fueling the economy and demand for ringgit?
05:02Is the domestic economy still strong? Is powering ahead? And that's still going on.
05:07So again, the fundamentals are still in our favour.
05:10At what oil price would you be concerned about inflation?
05:13We had Bank Negara, you know, standing pat pretty much, taking a cautious approach.
05:19What's the view on inflation? What's the forecast for inflation?
05:23Again, I think it's only fair to wait and see what happens along the way.
05:28$80, $90 a barrel is okay?
05:31If we look at what we've done, what we've done is subsidy rationalisation.
05:35And one of the key things was actually to cushion the economy from the subsidy rationalisation.
05:40So today, from a diesel point of view, what was 100% subsidy mechanism,
05:44now has reduced to only about 45% of the fuel is actually a subsidised fuel that's in the market
05:50today.
05:50Which means that whatever the price is coming in is being passed through to the system.
05:55So the cushions and the resilience that's being built in and the buffers, it's actually worked.
06:00On balance, given Petronas and its contribution to the economy, are you in a good position?
06:07Is it enough to buffer whatever price that we may see in oil prices?
06:11I think we have a good mechanism that's worked along the way.
06:15Well, in the past, we were keeping prices through subsidies and sustaining that,
06:21which meant that the fiscal pressure on the government was always very, very high.
06:25When we did our subsidy rationalisation, we reduced that risk to that amount.
06:30And you've seen us move prices every week, which means the pass-through to the economy is also happening.
06:35And the sustaining of inflation at a level today still remains within range.
06:41Minister, just a wonderful question. The biggest risk for you?
06:46The biggest risk is, I think, fundamentally how long this will go.
06:49And we all have to live in reality.
06:52So we hope that cooler hits will prevail, then we will come back to a lot more order in the
06:59world today,
07:00and lives will be best looked after.
07:04And then this crisis resolves in a diplomatically viable and possible positive way.
07:12And in that sense, the world can then begin to move ahead.
07:16The world has shown that it's a lot more resilient than it was in the past,
07:20and last year was I tried a lot of things in terms of what trade has actually done.
07:24And as long as we have that range of adjustments, we're okay.
07:30The key challenge we'll develop if this is a prolonged six months, nine months, twelve months,
07:36then everybody really has to reassess again in terms of what we do.
07:40From a Malaysian perspective, we do what we can control with.
07:44And I think one of the key things that we've been focused about is how do you build your fast
07:48buffers?
07:48How do you build your different engines of growth?
07:52And that's the secret of building resilience in the economy.
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