Anwar: Reforms paying off as Malaysia rises in global rankings

New Straits Times

4 hours ago

PUTRAJAYA: Prime Minister Datuk Seri Anwar Ibrahim today highlighted Malaysia's improving economic trajectory, citing robust growth, lower unemployment, and renewed investor confidence.
He attributed these positive developments to a series of fiscal reforms and targeted policies, while firmly dismissing allegations of economic mismanagement by the government.
Speaking at the Finance Ministry's monthly assembly, he said the latest data told a story of recovery, reform, and resilience.
Malaysia has climbed 11 spots to rank 23rd in the 2025 IMD World Competitiveness Ranking — its highest position since 2020 — with notable gains in economic performance, government efficiency, and business competitiveness.
The country's gross domestic product (GDP) expanded by 5.1 per cent in 2024, exceeding the 3.5 per cent recorded in 2023 and surpassing official projections. The unemployment rate fell to 3 per cent in April 2025 — the lowest in a decade.
The ringgit also posted significant gains, emerging as one of Asia's top-performing currencies. It appreciated by 5.2 per cent against the US dollar and strengthened against regional currencies such as the Indonesian rupiah and Chinese renminbi.
Anwar said that Malaysia's fiscal reforms had received commendation from the International Monetary Fund (IMF), which described the Fiscal Responsibility Act 2023 as a major milestone.
The fiscal deficit has been reduced from 5.5 per cent in 2022 to 4.1 per cent in 2024, with a target of 3.8 per cent for 2025. Federal borrowing has also decreased, with new debt issuance falling from RM100 billion in 2022 to RM85 billion in 2024.
This, Anwar said, had enabled the government to sustain public services while maintaining fiscal discipline.
He stressed that the reforms were undertaken without placing undue burden on the public.
The government had broadened the tax base and restructured subsidies to ensure more effective support and service delivery.
Eighty-five per cent of households were unaffected by electricity tariff adjustments, while diesel subsidies for logistics vehicles were maintained to prevent a knock-on effect on prices.
Inflation remained contained at 1.8 per cent in 2024.
The adjustment to the Sales and Service Tax (SST), effective from July 1, excludes essential goods. Analysts have forecast only a marginal inflationary impact of 0.25 per cent.
With improved fiscal space, the government has been able to boost allocations for public assistance and essential services.
A record RM13 billion was channelled to the SARA and STR cash aid programmes this year, benefiting nine million recipients.
Funding for education and healthcare was also raised to RM64 billion and RM45 billion, respectively.
"This nation inherited a burdensome fiscal structure — ballooning debt, a narrow revenue base, and untargeted subsidies that disproportionately benefited the wealthy and foreign nationals.
"Whether we liked it or not, reform was essential. Since the Madani government took office, we have embraced bold, corrective policies to restore our fiscal foundation and uplift the people's lives," he said.