Malaysia’s economy has returned to pre-crisis levels, according to the country’s Deputy Finance Minister, Steven Sim.

The country’s economic growth reached 5.6% in Q1 2023 as it exceeded some of its regional neighbours.

“We surpassed the economic growth of Indonesia (5.0%), Vietnam (3.2%), China (4.5%) and Singapore (0.1%),” Sim said during a speech at the National Economic Forum 2023 in Kuala Lumpur Convention Centre on Thursday.

In regard to demand, the Deputy Finance Minister added that growth was fuelled by private sector expenditure following ongoing improvement in the labour market, coupled with public investment in several infrastructure projects, The Star reports.

In terms of supply, notable growth was registered across sectors, with the services sector and manufacturing sector recording 7.3% and 3.2% expansion, respectively, Sim went on to say.

Yet despite the economic growth, Sim said the Goods and Services Tax (GST) would not be applied anytime soon.

“Lower income groups pay more tax as a ratio of their income compared to those of the higher income groups as based on a 2015 study by the Penang Institute.

“As such, now is not the time for GST as many are still recovering financially themselves from the multiple crises,” he said.

Sim added that the government's fiscal policy would remain focused on helping business growth but would prioritise more stringent spending control.

“The first priority is ensuring there is sustainable growth momentum in our economy whether it'd be more investments or opportunities for foreign and local businesses.

“Once businesses are making money then we will focus on implementing more efficient and progressive taxation so that the benefits can be shared among the people,” Sim stated.

“Lastly, once the country's revenue has increased, we will focus on practising greater fiscal discipline to ensure taxpayers' money is spent more prudently and transparently to prevent any corruption, leakages or wastages,” he said.