There has been an improvement to Malaysia’s growth outlook due to soaring oil prices and the reopening of the economy.

This is according to Moody’s Analytics, whose chief Asia-Pacific (APAC) economist Steve Cochrane said changes have arisen to the near-term economic outlook due to mixed signals across APAC nations within their export and domestic economies.

He continued that Moody’s has increased its June forecast for Malaysia’s real GDP this year to 7% since the war in Ukraine broke out. The GDP outlook for Malaysia and the Philippines is improved due to stronger than forecast Q1 growth, reports The Malaysian Reserve.

“For Malaysia, we have improved the GDP growth forecast partly because the country is a net exporter of crude oil,” he said during a webinar entitled ‘APAC Economic Outlook: Resilience, So Far’ today.

“Malaysia benefits from continued high crude oil prices, along with the elevated prices for oil and the continued exports of its tech goods.

“The fairly good breadth of its export base bodes well for Malaysia,” he added.

Furthermore, Cochrane stated there was an overall rebound in the country’s domestic consumption growth. Q1 GDP growth was stronger than predicted, with momentum set to continue as movement restrictions ease, boosting domestic demand. Economic activity also continued to return to normal as Covid measures were relaxed.

As such, Malaysia’s economy grew 5% year-on-year in the first quarter of 2022, compared to a 0.5% contraction in the same three months of 2021, predominantly boosted by improved domestic demand.

Moreover, Moody’s Analytics added the resilience of the APAC region economy continues despite rising inflation, stemming from sanctions imposed on Russia, shortages of goods and commodities due to the war in Ukraine and lockdowns in China within the country’s zero-Covid strategy.