Economic Outlook 2023

   

The Budget 2023 allocated the total expenditure of RM386 billion, compared to RM395 billion in Budget 2022. 

  

Out of the total expenditure allocation of RM386 billion, RM289 billion are intended for Operating Expenditure, and RM97 billion for Development Expenditure. The total expenditure is estimated to be slightly lower due to the expiry of the COVID-19 funds, as well as the spending optimisation measures. 

   

The Government revenue collection is also being projected to be reduced from RM294 billion in year 2022 to RM292 billion in year 2023, due to an anticipated decline in non-tax revenue.

   

Outlook on Economic Growth

Slower expansion in the global economy is expected due to the tightening of global financial conditions in order to counter inflation. In spite of that, the ASEAN-5 countries (i.e., Malaysia, Indonesia, Vietnam, Thailand and Philippines)  are expected to outrun the global growth due to stable domestic demand. 

   

The Malaysian Government projects a moderate economic growth in 2023 with GDP expected to be at 4.5 percent. The Malaysian economy will be supported by the recovery of major infrastructure projects, improvements in the supply of labour and related tourism activities. 

   

The private sector is projected to remain a major contributor to economic growth. The improvement of the labour market, high rate of tourism activities, and the increased investment in manufacturing are expected to drive domestic demand.

    

The headline inflation is expected to range between 2.8 percent to 3.8 percent, while the unemployment inflation rate is expected to range between 3.5 percent to 3.7 percent in 2023.