Another year, another annual report! Here’s what you can learn from Bank Negara’s 2022 annual report.

Bank Negara Malaysia’s (BNM) annual report for 2022 is now available. As usual, Malaysians pay a lot of attention to what it has to say for the year before and ahead.

BNM’s annual report is however rather long and technical that it is difficult for the regular Malaysian to understand. From talking about the economy to the financial sector, there is just a lot of information to uncover and go through.

With that in mind, we are here to highlight the key takeaway points for you to take and understand.

#1: Expect Economy to Grow between 4.0% and 5.0% in 2023

How will the economy perform in 2023? BNM thinks it will grow at a range of 4.0% to 5.0%, lower than the 8.7% registered in 2022.

This means the economy will still grow but just at a slower rate. Should you be concerned? No, you shouldn’t be. 2022 was an exceptional year, as the government relaxed the movement control order restrictions.

As a result, many of you went out to spend the savings you accumulated in 2020 and 2021. Businesses were also allowed to operate again, which was good news. That 8.7% growth was way above the 5.0% historical average before the pandemic so it makes sense that 2023 will be the year when it returns to normal.

If you own a business, things should be back to normal. While you might have grown a lot in 2022, you might have to tamper down your growth expectations in 2023. For example, if your profits grew by 20% in 2022, expect that it will still grow in 2023, but probably lower at about 10% to 15%.

#2: Malaysian Tourism Industry to Bounce Back

After three years of the pandemic, 2023 is set to be the year of Cuti-Cuti Malaysia. Finally, the borders are open, and tourists can now visit Malaysia without any restrictions.

BNM projects that tourism revenue will more than double to RM58.0 billion in 2023 from RM27.9 billion in 2022. This is important because tourism provides a lot of jobs for Malaysians. In 2019, tourism jobs encompass about 23.6% of total employed people in Malaysia.

With China now opening its international borders, Malaysia is set to receive a lot of Chinese tourists … and they really spend a lot. In 2019, Chinese tourists spent a total of US$277 billion or about 20% of total tourist spending in the world. Chinese tourists to Malaysia rank second for the highest tourist revenue at RM15.3 billion or 17.8% of total tourist revenue in 2019.

If you are operating or working in the tourism industry, rejoice! Business is back!

#3: Prices and Cost of Living Could Be Higher

Here’s the tricky part. Malaysia’s inflation (which measures how much prices have increased generally), was at 3.3% in 2022, and BNM thinks that inflation will be around 2.8% to 3.8%.

Basically, BNM is saying this. Inflation could be lower or higher next year. The highest it can go is 3.8%, and the lowest will be 2.8%. If you are struggling to make ends meet, you need to take note of this to plan your expenses for the year.

Should you be worried if inflation is above 3.8%? Both, actually. It’s a Yes, because inflation only averaged about 2.3% from 2004 to 2019. It’s also a No, because Malaysia experienced the highest inflation of 4.7% in August 2022.

#4: Malaysian Banks Are Resilient

You might have heard about the Silicon Valley Bank and Credit Suisse problems, and worried whether Malaysian banks would have these problems too.

Rest assured, Malaysian banks are resilient according to BNM. To put it simply, the banks have enough money to absorb losses that are big. If you are worried about whether your money is safe in the bank, they are.

In more technical terms, the liquidity coverage ratio (LCR) of banks have increased from 125% in 2015 to 154% in 2022. It is best for banks to have LCR of above 100% to be safe.

#5: The Job Market is Expected to Improve

For the job seekers out there, this could be good news. BNM projects the number of employed Malaysians to increase to 16.1 million in 2023 from 15.8 million in 2022.

If you have been finding it hard to land a job in the past couple of years, 2023 might be the year. Furthermore, BNM also projects that salaries (non-executive positions) will grow by 5.4% in 2023 in case you are worried that you might not be getting paid that well.

Finally, the tax cuts could also prove to be a life-saver as it means you have more money in your account. 2023 will mark the year where things are finally getting back to normalcy.

Conclusion

The Bank Negara Malaysia’s Annual Report 2022 could be useful to you as an ordinary Malaysian. It can help you plan some of your finances and expenses according to how well the economy is doing or how high price could be for the year. Furthermore, if you are worried about your money being safe in the bank, have no fear as BNM has assured that your hard-earned money is.

 

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