This was attributable to a number of external and domestic shocks affecting the economy since late 2014. The major policy reforms such as the implementation of the GST also saw households and businesses adjusting their spending. As we move forward, these shocks will gradually dissipate and growth of the Malaysian economy will improve. Further support is also forthcoming in the  BIS central bankers’ speeches  1  form of Government measures to increase disposable income; thus, facilitating households and firms’ on-going adjustments. The assessment is therefore for the economy to grow by 4 to 4.5% for 2016. Importantly, our financial system remains resilient and supportive of the economy. It is important to recognise the underlying reasons for the resilience of the Malaysia economy. This resiliency has been as a result of the continued strength of our fundamentals and the successful reforms and structural adjustments we have undertaken over the last decade. Three changes to the economy have been particularly instrumental. Firstly, the structure of the economy has become more diversified and over-reliance on any particular industry has been mitigated. Secondly, growth has also become more balanced, driven by continued private sector activities with imbalances and excesses kept in check through keys measures implemented by the Government and Bank over several years. This has been complemented by crucial fiscal reforms that, while having short-term costs and being very unpopular, ultimately put the economy on a more sustainable growth path. Third, is the continued strength of our external position.

Building from Malaysia’s leading position as an international Islamic finance centre, efforts to promote the sustainable growth of Islamic finance supported by a dynamic ecosystem will create opportunities for high income employment. At the same time, ASEAN integration remains high on Bank Negara Malaysia’s agenda. Meeting the e-payment targets that Bank Negara has set is also vital to enhance our economic efficiency, competitiveness and productivity. And we will continue to direct efforts at ensuring that all Malaysians can participate effectively in the financial system. Bank Negara will also continue to work with the Government on a range of economic priorities to sustain the Malaysian economy on a steady growth path. This includes the continued support and development of SMEs, and improvement in access to affordable housing. An area that demands greater attention and coordination going forward is the ‘sharing economy’. We have already seen how the likes of Uber and AirBnB have changed the business model of the transport and hotel sectors, and enhanced the earning potential for asset owners, lower costs for users, and drive innovation and service quality improvements among incumbent providers. They can also bring important benefits for the environment through the reduction of wastage and control of over-consumption. Similar innovative trends are also emerging within the banking and finance sector. To reap the benefits of technological advancements,  2  BIS central bankers’ speeches  the Bank will work closely with relevant agencies and innovators in this space on new ways of delivering new products and services.