In 2023, the pace of economic growth in Malaysia is expected to slow.

Economists predicted Thursday that the Malaysian economy would stall in 2023 due to difficult external conditions and weakening domestic demand.

According to Xinhua News Agency, Maybank Investment Bank Research predicted in a report that Malaysia's full-year growth would slow to 4% in 2023 from an earlier projection of 8%. This slowdown would be caused by a reduction in domestic demand.

The consequences of rising inflation and interest rates on the cost of living and real disposable income are expected to dampen private consumption growth next year, according to the research firm.

It also predicts a slowing of the rate of increase in private consumption to match the reduced level of funding for government operations that is included in the Budget 2023.

It also noted that reduced expectations for global economic development would lead to falling exports and imports.

MIDF Research, on the other hand, predicts that Malaysia's GDP growth would decrease to 4.2% in 2023, mostly due to a slowdown in the country's export performance as a result of a slowdown in global demand.

For 2019, we predict a slowdown rather than a recession for the global economy. According to MIDF Research, "demand conditions in the United States and the European Union will decrease next year due to increased interest rates and elevated inflationary pressure."

The research firm predicts that Malaysia's real exports growth will decrease to 2.8% by 2022 from the 2022 growth prediction of 12.5%, with some of the support coming from an increase in the export of services in light of the increased optimism surrounding the country's tourism industry.

But in terms of merchandise trade, it is predicted that the average prices of crude palm oil (CPO) and Brent crude oil would remain elevated at 3,500 ringgit ($794) per tonne and $96 per barrel, respectively, for the upcoming year.

Consistently strong consumer spending, enhanced tourism-related activities, and a resurgence in infrastructure projects are all reasons for optimism for the Malaysian domestic economy, according to MIDF Research.

However, Affin Hwang Investment Bank has lately reduced its GDP projections for 2023 from 4.7 percent to 3.7 percent on the grounds that a slowdown in global development will have a detrimental effect on Malaysia's open economy.

While Malaysia will feel the effects of the global slowdown in GDP, the research firm's consensus is that a recession is highly improbable due to the country's strong labor market and the steady recovery of tourism-related industries.

It did, however, speculate that the cost of living in Malaysia could rise without a serious effort on the part of the government to shore up the country's finances and allay the fears of sovereign rating agencies.