adnan zaylani mohamad zahid : propelling malaysia forward keynote address by mr adnan zaylani mohamad zahid, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the affin market outlook " propelling malaysia forward ", organised by menara affin, kuala lumpur, 30 january 2024. * * * it is my great pleasure to be here with you this morning. firstly, i would like to express my gratitude to affin bank for inviting me to deliver the keynote address. the theme " propelling malaysia forward " is a good choice. a prompt for us to think about what's in store for us, and to inspire us to envision how we can position ourselves in 2024. this gathering is therefore timely as we start the year. it provides a platform for us to discuss the outlook, the opportunities and new challenges while we seek to capitalise and realise malaysia's potential. allow me then to share some of malaysia's unique outlook and propositions that will set the stage for us to secure a strong 2024. 2023 was a challenging year for us. malaysia's growth was marked by moderation, weighed down by weak global demand and low commodity prices against tight global financial conditions. despite these external headwinds, huge strides were made domestically. the seeds for structural change are now in place as the new government embarked on a series of fiscal and economic reforms. heading into 2024, i believe malaysia is poised for continued growth and is well - positioned to capitalise on emerging growth areas. and i believe all of us here will have a significant role to play in " propelling malaysia forward ". domestically, the outlook for the malaysian economy remains favourable. the economy is expected to grow by 4 % - 5 % this year, as outlined in belanjawan 2024. despite the prospect of moderate global growth, domestic demand is projected to be robust, supported by continued employment and further wage growth. this will further be buoyed by a strong labour market, with our labour participation rate at an all - time high of 70. 1 %. tourist arrivals and spending are also expected to improve further. in the first nine months of 2023 alone, 14. 5 million tourists visited malaysia, which is more than the full - year tourist arrivals in 2022 of 10. 1 million. i also find it reassuring that malaysia has taken the initiative to begin charting a path forward on

many fronts, enhancing its attractiveness as a business and investment destination. the private sector is more visibly contributing and supporting the overall growth in investment activity, particularly in key industries such as information and communications technology ( ict ), electrical and electronics ( e & e ), chemicals and chemical products. progress of multi - year infrastructure projects and the implementation of catalytic initiatives under the national energy transition roadmap ( netr ), new industrial master plan 2030 ( nimp 2030 ), and the mid - term review of the twelfth malaysia plan ( mtr of the twelfth plan ) will go towards securing critical building blocks for growth. a clear roadmap supported by sound policy will go a long way towards sustaining and facilitating investment activity, which is crucial for us to realise these plans. going forward, implementation is key. to further support this, we should heed the prime minister's call to increase domestic direct investments as we share the collective responsibility in driving our economic growth. 1 / 5 bis - central bankers'speeches efforts to elevate malaysia's growth potential and global competitiveness would not be complete without fiscal discipline. on this front, the government has committed itself to the public finance and fiscal responsibility act ( fra ). this will enhance the credibility of fiscal policy towards achieving long - term public finance sustainability. the fra entails measures such as gradually reducing the fiscal deficit and targeted subsidy rationalisation, including initiatives such as the pangkalan data utama ( padu ) platform aimed at supporting targeted, accurate and transparent subsidy distribution. while subsidy rationalisation may result in some upward price adjustments, the inflation outlook for 2024 remains fairly stable, helped by the disinflation trend of 2023, which saw our inflation average at 2. 5 % for the year. let me now move on to global financial market conditions, which i believe to be conducive for a recovery in the performance of the ringgit. for the past two years, the ringgit, together with other regional currencies has faced depreciation pressures amidst aggressive interest rate hiking policies pursued in advanced economies as they grappled with persistently high inflation levels. in 2023, ringgit depreciation had continued, driven by elevated global interest rate levels, the slowdown in china and geopolitical tensions in the middle east. as we enter 2024, the landscape is evolving ; inflation in advanced economies is showing signs of moderation, providing a clearer trajectory of monetary policy to be