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The Sun
7 days ago
- Business
- The Sun
OECD urges Malaysia to enhance competitiveness, resilience
KUALA LUMPUR: The Organisation for Economic Cooperation and Development (OECD) has urged Malaysia to implement further measures to enhance its economic competitiveness and strengthen its resilience. Speaking during a virtual conference on the OECD Economic Outlook today, the organisation's head of division for Southeast Asia, Jens Arnold, said Malaysia should consider additional reforms to bolster its resilience amid ongoing global uncertainties. Recent media reports indicate that the United States has proposed a so-called 'revenge tax' – a retaliatory initiative aimed at countering what it views as unfair tax practices by other nations. The proposed measure would apply to passive income earned from US investments and profits generated by companies operating within the country. It specifically targets foreign-owned entities, including governments, corporations and private foundations, potentially affecting a broad spectrum of international stakeholders. Arnold said improvements in Malaysia could include reducing the remaining restrictions on foreign direct investment (FDI) and ensuring a more level playing field between state-owned enterprises, government-linked companies, and the private sector. 'Malaysia has some scope for support on the monetary side. Inflation is low and has been very well contained, but beyond that, it is even more important to consider structural policies that can enhance the economy's competitiveness going forward,' he said. He also emphasised the importance of addressing labour market challenges, particularly skills mismatches, through increased investment in education to better equip the workforce for future disruptions. 'These are critical steps to make the economy more resilient and capable of withstanding shocks on the horizon,' he added. Meanwhile, OECD chief economist Alvaro Pereira said Malaysia's economy is projected to grow by 3.8% in 2025, due to expectations of softer export performance. He noted that although Malaysia recorded a stronger export performance in 2024, continuing global uncertainties may weigh on trade this year. Pereira also said Malaysia's inflation was 1.8% in 2024, and is expected to rise modestly to 2.2% in 2025, before climbing to 2.7% in 2026. 'Currently, Malaysia's labour market is remarkably strong and is expected to support private consumption going forward. Unemployment is at a 10-year low, while labour force participation continues to rise steadily,' he said. He added that the current monetary policy stance is broadly neutral and is rightly expected to remain so, though there is some room for easing should growth weaken. However, he cautioned that monetary authorities should remain vigilant to potential price pressures, especially from a tight labour market, as well as increases in the minimum wage and civil servants' salaries. Arnold said that in 2024, the five key Southeast Asian countries – Indonesia, Malaysia, the Philippines, Thailand and Vietnam – grew at a weighted average of 5%, a pace that was considerably stronger than, or on par with, growth in the OECD area (Europe, the Americas and Asia-Pacific), as well as in China. However, he said the OECD projects a more challenging growth environment for the region this year. 'What is clear is that tariffs and the policy uncertainty we are seeing now are likely to dent trade and investment, which will take a toll on overall growth. Some of the most recent purchasing manager indices already show early signs of slowing activity,' he said. He also highlighted that opening up markets to greater competition could significantly boost productivity. 'For instance, regulatory policies – particularly those related to licensing and administrative burdens for new entrants, including foreign players – often play a crucial role in this regard. 'The five Southeast Asian countries remain more restrictive than many other economies, so reducing barriers to FDI and services would be an effective way to improve the competitiveness of domestic producers,' he added. – Bernama
Malay Mail
05-06-2025
- Business
- Malay Mail
OECD: Malaysia must tackle skills gap, level playing field to boost resilience
KUALA LUMPUR, June 5 — The Organisation for Economic Co-operation and Development (OECD) has urged Malaysia to implement further measures to enhance its economic competitiveness and strengthen its resilience. Speaking during a virtual conference on the OECD Economic Outlook today, the organisation's head of division for Southeast Asia, Jens Arnold, said Malaysia should consider additional reforms to bolster its resilience amid ongoing global uncertainties. Recent media reports indicate that the United States (US) has proposed a so-called 'revenge tax' — a retaliatory initiative aimed at countering what it views as unfair tax practices by other nations. The proposed measure would apply to passive income earned from US investments and profits generated by companies operating within the country. It specifically targets foreign-owned entities, including governments, corporations, and private foundations, potentially affecting a broad spectrum of international stakeholders. Arnold said improvements in Malaysia could include reducing the remaining restrictions on foreign direct investment (FDI) and ensuring a more level playing field between state-owned enterprises, government-linked companies, and the private sector. 'Malaysia has some scope for support on the monetary side. Inflation is low and has been very well contained, but beyond that, it is even more important to consider structural policies that can enhance the economy's competitiveness going forward,' he said. He also emphasised the importance of addressing labour market challenges, particularly skills mismatches, through increased investment in education to better equip the workforce for future disruptions. 'These are critical steps to make the economy more resilient and capable of withstanding shocks on the horizon,' he added. Meanwhile, OECD chief economist Alvaro Pereira said Malaysia's economy is projected to grow by 3.8 per cent in 2025, due to expectations of softer export performance. He noted that although Malaysia recorded a stronger export performance in 2024, continuing global uncertainties may weigh on trade this year. Pereira also said Malaysia's inflation was 1.8 per cent in 2024, and is expected to rise modestly to 2.2 per cent in 2025, before climbing to 2.7 per cent in 2026. 'Currently, Malaysia's labour market is remarkably strong and is expected to support private consumption going forward. Unemployment is at a 10-year low, while labour force participation continues to rise steadily,' he said. He added that the current monetary policy stance is broadly neutral and is rightly expected to remain so, though there is some room for easing should growth weaken. However, he cautioned that monetary authorities should remain vigilant to potential price pressures, especially from a tight labour market, as well as increases in the minimum wage and civil servants' salaries. Southeast Asia Outlook Arnold said that in 2024, the five key Southeast Asian countries — Indonesia, Malaysia, the Philippines, Thailand, and Vietnam — grew at a weighted average of five per cent, a pace that was considerably stronger than, or on par with, growth in the OECD area (Europe, the Americas, and Asia-Pacific), as well as in China. However, he said the OECD projects a more challenging growth environment for the region this year. 'What is clear is that tariffs and the policy uncertainty we are seeing now are likely to dent trade and investment, which will take a toll on overall growth. Some of the most recent purchasing manager indices already show early signs of slowing activity,' he said. He also highlighted that opening up markets to greater competition could significantly boost productivity. 'For instance, regulatory policies — particularly those related to licensing and administrative burdens for new entrants, including foreign players — often play a crucial role in this regard. 'The five Southeast Asian countries remain more restrictive than many other economies, so reducing barriers to FDI and services would be an effective way to improve the competitiveness of domestic producers,' he added. — Bernama
New Straits Times
04-06-2025
- Business
- New Straits Times
OECD urges Malaysia to boost competitiveness amid global uncertainty
KUALA LUMPUR: The Organisation for Economic Co-operation and Development (OECD) has urged Malaysia to implement further measures to enhance its economic competitiveness and strengthen its resilience. Speaking during a virtual conference on the OECD Economic Outlook today, the organisation's head of division for Southeast Asia, Jens Arnold, said Malaysia should consider additional reforms to bolster its resilience amid ongoing global uncertainties. Recent media reports indicate that the United States (US) has proposed a so-called "revenge tax" — a retaliatory initiative aimed at countering what it views as unfair tax practices by other nations. The proposed measure would apply to passive income earned from US investments and profits generated by companies operating within the country. It specifically targets foreign-owned entities, including governments, corporations, and private foundations, potentially affecting a broad spectrum of international stakeholders. Arnold said improvements in Malaysia could include reducing the remaining restrictions on foreign direct investment (FDI) and ensuring a more level playing field between state-owned enterprises, government-linked companies, and the private sector. "Malaysia has some scope for support on the monetary side. Inflation is low and has been very well contained, but beyond that, it is even more important to consider structural policies that can enhance the economy's competitiveness going forward," he said. He also emphasised the importance of addressing labour market challenges, particularly skills mismatches, through increased investment in education to better equip the workforce for future disruptions. "These are critical steps to make the economy more resilient and capable of withstanding shocks on the horizon," he added. Meanwhile, OECD chief economist Alvaro Pereira said Malaysia's economy is projected to grow by 3.8 per cent in 2025, due to expectations of softer export performance. He noted that although Malaysia recorded a stronger export performance in 2024, continuing global uncertainties may weigh on trade this year. Pereira also said Malaysia's inflation was 1.8 per cent in 2024, and is expected to rise modestly to 2.2 per cent in 2025, before climbing to 2.7 per cent in 2026. "Currently, Malaysia's labour market is remarkably strong and is expected to support private consumption going forward. Unemployment is at a 10-year low, while labour force participation continues to rise steadily," he said. He added that the current monetary policy stance is broadly neutral and is rightly expected to remain so, though there is some room for easing should growth weaken. However, he cautioned that monetary authorities should remain vigilant to potential price pressures, especially from a tight labour market, as well as increases in the minimum wage and civil servants' salaries. Southeast Asia Outlook Arnold said that in 2024, the five key Southeast Asian countries — Indonesia, Malaysia, the Philippines, Thailand, and Vietnam — grew at a weighted average of five per cent, a pace that was considerably stronger than, or on par with, growth in the OECD area (Europe, the Americas, and Asia-Pacific), as well as in China. However, he said the OECD projects a more challenging growth environment for the region this year. "What is clear is that tariffs and the policy uncertainty we are seeing now are likely to dent trade and investment, which will take a toll on overall growth. Some of the most recent purchasing manager indices already show early signs of slowing activity," he said. He also highlighted that opening up markets to greater competition could significantly boost productivity. "For instance, regulatory policies — particularly those related to licensing and administrative burdens for new entrants, including foreign players — often play a crucial role in this regard. "The five Southeast Asian countries remain more restrictive than many other economies, so reducing barriers to FDI and services would be an effective way to improve the competitiveness of domestic producers," he added.
The Star
04-06-2025
- Business
- The Star
OECD urges Malaysia to boost competitiveness amid global uncertainty
KUALA LUMPUR: The Organisation for Economic Co-operation and Development (OECD) has urged Malaysia to implement further measures to enhance its economic competitiveness and strengthen its resilience. Speaking during a virtual conference on the OECD Economic Outlook today, the organisation's head of division for Southeast Asia, Jens Arnold, said Malaysia should consider additional reforms to bolster its resilience amid ongoing global uncertainties. Recent media reports indicate that the United States (US) has proposed a so-called "revenge tax' - a retaliatory initiative aimed at countering what it views as unfair tax practices by other nations. The proposed measure would apply to passive income earned from US investments and profits generated by companies operating within the country. It specifically targets foreign-owned entities, including governments, corporations, and private foundations, potentially affecting a broad spectrum of international stakeholders. Arnold said improvements in Malaysia could include reducing the remaining restrictions on foreign direct investment (FDI) and ensuring a more level playing field between state-owned enterprises, government-linked companies, and the private sector. "Malaysia has some scope for support on the monetary side. Inflation is low and has been very well contained, but beyond that, it is even more important to consider structural policies that can enhance the economy's competitiveness going forward,' he said. He also emphasised the importance of addressing labour market challenges, particularly skills mismatches, through increased investment in education to better equip the workforce for future disruptions. "These are critical steps to make the economy more resilient and capable of withstanding shocks on the horizon,' he added. Meanwhile, OECD chief economist Alvaro Pereira said Malaysia's economy is projected to grow by 3.8 per cent in 2025, due to expectations of softer export performance. He noted that although Malaysia recorded a stronger export performance in 2024, continuing global uncertainties may weigh on trade this year. Pereira also said Malaysia's inflation was 1.8 per cent in 2024, and is expected to rise modestly to 2.2 per cent in 2025, before climbing to 2.7 per cent in 2026. "Currently, Malaysia's labour market is remarkably strong and is expected to support private consumption going forward. Unemployment is at a 10-year low, while labour force participation continues to rise steadily,' he said. He added that the current monetary policy stance is broadly neutral and is rightly expected to remain so, though there is some room for easing should growth weaken. However, he cautioned that monetary authorities should remain vigilant to potential price pressures, especially from a tight labour market, as well as increases in the minimum wage and civil servants' salaries. Southeast Asia Outlook Arnold said that in 2024, the five key Southeast Asian countries - Indonesia, Malaysia, the Philippines, Thailand, and Vietnam - grew at a weighted average of five per cent, a pace that was considerably stronger than, or on par with, growth in the OECD area (Europe, the Americas, and Asia-Pacific), as well as in China. However, he said the OECD projects a more challenging growth environment for the region this year. "What is clear is that tariffs and the policy uncertainty we are seeing now are likely to dent trade and investment, which will take a toll on overall growth. Some of the most recent purchasing manager indices already show early signs of slowing activity,' he said. He also highlighted that opening up markets to greater competition could significantly boost productivity. "For instance, regulatory policies - particularly those related to licensing and administrative burdens for new entrants, including foreign players - often play a crucial role in this regard. "The five Southeast Asian countries remain more restrictive than many other economies, so reducing barriers to FDI and services would be an effective way to improve the competitiveness of domestic producers,' he added. - Bernama
Free Malaysia Today
04-06-2025
- Business
- Free Malaysia Today
OECD urges M'sia to boost competitiveness amid global uncertainty
OECD said Malaysia could attract more investment by easing restrictions on FDI and promoting fair competition between state-owned enterprises, GLCs and private firms. (Envato Elements pic) KUALA LUMPUR : The Organisation for Economic Cooperation and Development (OECD) has called on Malaysia to take further steps to improve its economic competitiveness and resilience in light of global uncertainties. Speaking at a virtual conference on the OECD Economic Outlook today, its Southeast Asia division head, Jens Arnold, said Malaysia should pursue additional reforms to strengthen its economy. Recent reports suggest the US is proposing a 'revenge tax' targeting what it sees as unfair tax practices. The measure would affect passive income from US investments and profits of foreign-owned entities, including governments, companies and foundations. Arnold said Malaysia could attract more investment by easing remaining restrictions on foreign direct investment (FDI) and promoting fair competition between state-owned enterprises, GLCs and private firms. 'Malaysia has some room for monetary support, as inflation remains low and well contained. But, more importantly, structural reforms are needed to strengthen competitiveness,' he said. He stressed the need to address labour market challenges, such as skills mismatches, through better education and workforce training. 'These steps are crucial to making the economy more resilient to future shocks,' he said. OECD chief economist Alvaro Pereira projected Malaysia's economy to grow by 3.8% in 2025, down from stronger export performance in 2024, as global trade slows. He said inflation, which stood at 1.8% in 2024, was expected to rise to 2.2% in 2025 and 2.7% in 2026. 'Malaysia's labour market is strong, with unemployment at a 10-year low and rising labour force participation. This should continue to support private consumption,' he said. He noted that monetary policy remained broadly neutral and appropriate, but there was room to ease if growth slowed. However, he warned that authorities must watch for potential inflationary pressures from a tight labour market and rising wages. Southeast Asian outlook remains uncertain Arnold said that in 2024, Indonesia, Malaysia, the Philippines, Thailand and Vietnam grew at a weighted average of 5%, comparable to or higher than growth in the OECD area and China. However, he warned that trade and investment could weaken this year because of tariffs and rising policy uncertainty, with early signs of slowing activity seen in purchasing manager indices. He said boosting competition could improve productivity, especially by reducing regulatory barriers for new and foreign businesses. 'These five Southeast Asian economies remain more restrictive than many others. Lowering barriers to FDI and services would help improve the competitiveness of local industries,' he said.
