Maybank says economic forecast for 2022 did not take into account the Russian-Ukrainian war and sees a side effect of the conflict

Datuk Seri Abdul Farid Alias ​​(Photo by Shahrin Yahya/The Edge)

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KUALA LUMPUR (April 14): Malayan Banking Bhd (Maybank) Group Chairman and Chief Executive Datuk Seri Abdul Farid Alias ​​said on Thursday (April 14, 2022) that while Maybank’s economic forecast for Malaysia took into account the impact of the country’s Covid -19 endemic transition since April 1, 2022 from pandemic status, the only event not factored into Maybank’s forecast is the Russian-Ukrainian war, which will impact on the global economy.

Speaking at a press conference in conjunction with Maybank’s virtual Annual General Meeting (AGM) here on Thursday, Abdul Farid said that although the direct impact on Malaysia’s economy from the invasion of Ukraine by Russia “is going to be insignificant”, he however warned that the impact of the Russian-Ukrainian conflict on the European economy as a potential second-order effect, which may or may not affect the economies of Malaysia and other countries in the Southeast Asian region.

“This is because Europe is a major investor and trading partner for ASEAN (Association of Southeast Asian Nations) and Malaysia. The secondary impact could be relatively large, but it depends how things will change over time,” said Abdul Farid.

He said the Malaysian economic outlook that Maybank gave earlier this year on the country’s gross domestic product (GDP), inflation and interest rates took into account that the Covid-19 pandemic would become endemic in Malaysia at this stage.

“We are on track with current progress [of the economy] only in april [2022] regarding the borders that will be reopened and more activities will be allowed outside than before.

“The perspectives that we have given with regard to the [Malaysian] GDP growth is around 6% and in the range of 5.3% to 6.3% [growth forecast] that BNM (Bank Negara Malaysia) has, [while Maybank’s Malaysia] inflation rate [forecast] is 2.7% and the interest rate or OPR (overnight policy rate) [is seen] to around 2% by the end of this year looking at [the expected] increase of 25 basis points in the last quarter of 2022,” Abdul Farid said.

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