With diminishing base effect and weaker external scene, we project Malaysia’s GDP to moderate to +4.0% in 2023. Existing market headwinds are subsiding as FFR-OPR spreads should soon peak, ringgit is recovering, supply chains are improving, labour woes are easing and the political impasse resolved. Granted, a recession in the developed West and its contagion is the key risk, but there could be cushioning from China’s likely reopening. In any case, Malaysia is now on a much stronger footing (from sustained reopening) than it was during the pandemic. Our 2023 KLCI target is at 1,580 (15.1x CY23 PE). |