KUALA LUMPUR: Malaysia’s gross domestic product (GDP) could grow between 5.5% and 6.5% in 2022 due to pent-up demand resulting from the opening of the local economy.
MIDF research chief Imran Yassin Md Yusof said this could inadvertently boost the local job market as consumers would be eager to reinvigorate their “crazy spending” nationwide.
“The economy has been affected by various periods of lockdown this year, reflecting a 4.5% contraction in the third quarter (Q3).
“Since the government has allowed most businesses to reopen, consumers would want to go out and spend,” he told a panelist session on Friday at Permodalan Nasional Bhd (PNB) Minggu Saham Digital (MSD ) 2021.
Imran said the local economy is doing better as most companies have started to resume operations by adhering to standard operating procedures (SOPs).
“We expect fourth quarter GDP to increase and economic activities to improve due to pent-up demand,” he said.
However, Imran remained cautious about the economic outlook for next year, attributing to potential inflation in the United States (US) and the resurgence of the new variant of Covid and the weakening of the real estate sector in China.
“If it goes higher than expected, the Federal Reserve may have to raise the interest rate, so we have to follow suit and the funding costs will be higher,” he said.
MIDF’s development finance division chief Azizi Mustafa said small and medium-sized enterprises (SMEs) should review their business strategies to remain relevant after the pandemic.
“We are entering the recovery phase for health and the economy. Therefore, SMEs should consider whether their business strategies and product offerings are still relevant.
“They also need to review their sales and marketing strategies as well as their supply chain,” he said.
Azizi said SMEs should adapt to the new normal and think ahead while capitalizing on opportunities to change their business strategies and plan to make them more relevant to deal with future shocks.
“Digitization and transformation need to happen in phases and not just to get on the bandwagon. Business owners need to plan well for the short, medium and long term to avoid wasting resources and capital,” said he said, adding that it had to suit their goals to get the return on their investments.
Azizi said business strategies will depend on supply and demand whether to grow or shrink.
“If there is an opportunity to grow the business, they should look on the demand side, like electronics and medical devices.
“If the business is not so good, it should restart the companies to keep them going. However, it is not wise to start growing the business despite a lower rate of profit environment,” he said. added.
Meanwhile, MIDF Digitization Manager Khairi Shahrin Arief Baki said novice investors should start small and know their investment goal before investing.
“Investing is about long-term planning, and they need to understand these fundamentals. They need to act now and they need to lay the groundwork,” he said.
He said investors should also be aware of fraudulent activity and remain vigilant before investing.
“They (investors) should check the websites of Bank Negara Malaysia and the Securities Commission to authenticate investment programs, which are highly regulated and registered with these regulators,” he added.
By New Straits Times
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