**BANK NEGARA MALAYSIA’S ANNUAL REPORT 2023**
Summary of some of the key takeaways from BNM's Annual Report 2023 are as follows:
1. Economic Growth Forecast: BNM maintains its forecast for Malaysia's economy to grow by 4-5% in 2024, up from 3.7% in 2023. This growth is expected to be supported by strong domestic spending and a potential recovery in exports;
2. Currency Depreciation: The Malaysian ringgit depreciated against the US dollar and other major trades in 2023. BNM cautioned that global monetary policy change might still present significant challenges despite expectations of reduced pressure on the ringgit;
3. Inflation Outlook: Inflation is expected to remain moderate in 2024, with the Consumer Price Index (CPI) forecasted to rise by 2-3.5% from 2.5% in 2023;
4. Current Account Surplus: BNM expects Malaysia’s current account surplus to improve in 2024 after hitting a 26-year low in 2023. This positive note is attributed to higher goods surplus and lower deficit in the services account;
5. Unemployment Rate: Unemployment rates have returned to pre-pandemic levels, reaching 3.4% in 2023. The rate has the potential to stabilize around 3.3% in 2024, which is close to full employment already by economic term;
6. Employment Growth: Certain service sectors, such as food and beverages, accommodation, and wholesale as well as retail trade, were key drivers of employment growth in 2023;
7. Banking Sector Stability: Gross impaired loan ratio of Malaysian banks is closing in to the pre-pandemic levels. With adequate capitalisation, banks might be able to withstand shocks; and
8. BNM is taking measures to manage short-term pressure on the ringgit by coordinating actions with the Government. The aim is to encourage the repatriation and conversion of foreign investment income by GLCs and GLICs. The Governor disclosed that besides engaging with GLCs and GLICs, BNM is also stepping up discussions with corporates and investors, monitoring conversion behaviour of domestic exporters and importers, and engaging them on any unusual trends observed.
9. In 2023, Malaysia achieved a significant milestone by recording total approved investments of RM329.5 billion, marking a 23% increase compared to the previous year. This figure represents the highest approved investments in the country’s history. Notably, foreign investments played a pivotal role, contributing 57.2% of the total investment amount.
