The World Bank has revealed that Malaysia’s economic fundamentals have retained their strength thank to the country’s diversified economy, Bernama reports.

According to the World Bank Group’s Macroeconomics, Trade and Investment lead economist, Richard Record, Malaysia’s diversified stream of income – which includes electrical and electronic manufacturing, commodities, natural resources and agriculture – is what aids Malaysia’s economy.

Speaking at the sidelines of the World Bank’s Conference on “Globalisation: Contents and Discontents”, Record said: “In the medium-term, there are challenges around human capital, productivity and governance.

“However, we have seen a lot of movement in the 11th Malaysia Plan Mid-Term Review for 2019-2020 whereby the government is setting out new plans to tackle those issues over the next few years.”

He went on to point out that Malaysia’s economic growth remained stable and the World Bank predicted it would increase by 4.7% in 2019.

This positive forecast comes just a week after the Nomura Global Markets research categorised the Malaysia equity market as being ‘neutral’, as opposed to ‘underweight’, being its previous ranking. The decision was based on poor earnings growth prospects and higher fiscal deficit of 3.9% for 2018.

Yet Finance Minister Lim Guan Eng responded in a statement a day later, noting that the government was positive about attaining 3.7% and 3.4% of fiscal deficit in 2018 and 2019, respectively.

He added: “I have checked with the preliminary financial accounts that were closed last year and the government’s fiscal position is well within the 3.7 per cent of gross domestic product (GDP) deficit target for 2018.

“Nomura’s report that the 2018 fiscal deficit would deteriorate to 3.9 per cent of GDP is simply untrue.”