Malaysia: Malaysia's economic growth could still surprise on the upside, depending on the duration of the West Asia conflict, said Bank Negara Malaysia (BNM) Deputy Governor Datuk Marzunisham Omar. He noted that household and private consumption will remain key anchors of growth, underpinned by positive income prospects and a favourable labour market.

According to BERNAMA News Agency, Marzunisham emphasized that these growth drivers are supported by targeted government policy, particularly aimed at assisting vulnerable groups, as well as strong performance in investment growth. He delivered these insights during his keynote address at the BNM Address on the Malaysian Economy and Panel Discussion.

Marzunisham stated that Malaysia's external position is strong, with adequate international reserves, sizable external assets, and a favourable external debt profile. He highlighted that nearly 60 per cent of the national debt is in medium- and long-term debt. He also pointed out the depth and liquidity of Malaysia's bond market, which benefits from a diversified investor base and inflows from stable long-term investors.

Additionally, Malaysia continues to record a current account surplus, indicating underlying strength. Its status as a net energy exporter provides further support amid elevated energy prices. The country is also experiencing sustained inflows of foreign direct investment, which reinforces the overall resilience of its external position.

Regarding inflation, Marzunisham noted that the outlook is highly dependent on the West Asia conflict's duration and severity. BNM is closely monitoring rising costs and their impact on consumers. Factors influencing the degree of cost pass-through include demand conditions and business profit margins. He mentioned that firms with stronger margins might pass on higher costs, while robust demand could help consumers absorb price increases. The pass-through, however, is typically not full based on past experiences.