Kuala Lumpur: The World Bank announced today that it expects Malaysia to achieve high-income nation status by 2028.
According to Bernama, Apurva Sanghi, the Bank’s lead economist for Malaysia, indicated that the country might even reach this milestone a year earlier if the ringgit’s current performance holds.
“This means high-income status is within reach.
“Based on our projection of the US dollar to ringgit exchange rate at 4.54 and an average growth rate of 4.3 per cent, we expect Malaysia to reach high-income status by 2028.
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However, he cautioned that high-income status does not necessarily equate to high development and warned of the potential risk of reversal.
Apurva credited the ringgit’s recent strength to improved investor sentiment, driven by three key factors.
They are a loosening of US monetary policy, stronger domestic economic data in the second quarter, and significant reforms implemented by the government.
“These factors have bolstered investor confidence and increased demand for the ringgit.
“Moreover, the government’s targeted initiatives, along with Bank Negara Malaysia’s efforts to repatriate funds and enhance the currency market’s functioning, have further supported the ringgit,” he added.
The World Bank also revised its 2024 growth forecast for Malaysia to 4.9 per cent, citing stronger-than-expected household consumption and improved investment and trade performance in the first half of the year.
Additionally, it noted that Malaysia’s GDP per capita is now approximately 12 per cent above pre-Covid levels, outperforming many of its Asean peers.
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