KUALA LUMPUR, Oct 11 (NNN-Bernama) — MIDF Research sees Malaysia’s jobless rate improving further, averaging 3.5 per cent in 2023, on the back of an improving domestic economy.
An uptick in tourism-related activities and expansion of primary sectors such as commodities will provide further support, it said.
The research house noted that the recovery of Malaysia’s labour market has continued as the jobless rate stayed at a “pandemic low” of 3.7 per cent in August 2022.
“The labour force and employment continued to expand 3.1 per cent year-on-year (y-o-y) and 4.2 per cent (y-o-y) respectively, unemployment dropped further by 18.3 per cent (y-o-y), and outside labour force reduced by 2.8 per cent (y-o-y) in August 2022.
“With this upbeat labour market performance, we are optimistic about stronger consumer spending in the second half of 2022 onward.
“Plus, the receding unemployment rate may lead Bank Negara Malaysia (BNM) to consider further normalisation of the overnight policy rate (OPR) in the upcoming Monetary Policy Committee (MPC) meetings,” it said in a research note.
For the first eight months of 2022, the jobless rate averaged 3.9 per cent while employment grew 3.5 per cent y-o-y and unemployment fell by 14.9 per cent.
Malaysia’s labour market is expected to stay in recovery trend and strengthen further in the second half of the year, underpinned by the upbeat momentum in the domestic economy and steady expansion in the external sector.
“Even though the 15th General Election (GE15) is set to take place in November, the election will reduce domestic political uncertainties and certainly the new government will table an expansionary fiscal policy for 2023.
“We believe stimulus bullets for labour market recovery and domestic economic growth will be among the major elements in the upcoming Budget 2023 after GE15,” it said.
MIDF has kept its unemployment rate forecast at 3.8 per cent for 2022.
— NNN-BERNAMA