{
  "title": "Malaysia: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Malaysia",
  "publication": "IMF Staff Country Reports, May 4, 2016",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2016/12/31/malaysia-2016-article-iv-consultation-press-release-staff-report-and-statement-by-the-43883",
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  "summary": "This paper discusses the extent to which the Malaysian economy has been hit by a number of external and domestic shocks since late 2014, including sharply lower energy prices, spillovers from China, capital outflows, and domestic political controversies.",
  "sections": [
    {
      "heading": "Executive summary and shocks",
      "content": "- Malaysian economy was hit by a number of external and domestic shocks since late 2014, including:\n  - sharply lower energy prices\n  - spillovers from China\n  - capital outflows\n  - domestic political controversies\n- The 2016 budget, including January recalibration, reaffirms the government’s commitment to fiscal consolidation.\n- Current accommodative monetary policy stance judged appropriate in an environment of moderating growth and low inflation.\n- Facing sizeable capital outflows and a sharp fall in oil and commodity prices, the exchange rate depreciated substantially.\n- The central bank deployed reserves; the effect on domestic interest rates was modest.\n- Credit growth has moderated after several years of double-digit growth."
    },
    {
      "heading": "Macroeconomic policy assessment",
      "content": "- Fiscal policy:\n  - 2016 budget and January recalibration signal continued fiscal consolidation commitment.\n- Monetary policy:\n  - Accommodative stance considered appropriate given moderating growth and low inflation.\n- External policy response:\n  - Central bank intervention through reserve deployment to address exchange rate pressures."
    },
    {
      "heading": "Financial sector and credit",
      "content": "- Credit dynamics:\n  - Credit growth moderated, reversing several years of double-digit growth.\n- Interest rates:\n  - Central bank actions had modest effects on domestic interest rates."
    },
    {
      "heading": "External sector and risks",
      "content": "- Exchange rate and reserves:\n  - Substantial exchange rate depreciation occurred amid sizeable capital outflows and sharp falls in oil and commodity prices.\n  - Central bank deployed reserves in response.\n- External shocks:\n  - Continued vulnerability to commodity price swings and spillovers from major trading partners such as China."
    },
    {
      "heading": "Subjects and thematic coverage",
      "content": "- Anti-money laundering and combating the financing of terrorism (AML/CFT)\n- Balance of payments\n- Capital outflows\n- Credit and money\n- Exports and international trade\n- External debt and loans\n- Crime\n\nSource: Malaysia: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Malaysia, May 4, 2016, International Monetary Fund.\n\n---\n\n Content in this bundle\n\n- Cr16110\n  - Cr16110 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Cr16110 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: May 4, 2016",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781484343067.002",
    "Malaysian economy was hit by a number of external and domestic shocks since late 2014, including:",
    "The 2016 budget, including January recalibration, reaffirms the government’s commitment to fiscal consolidation.",
    "Current accommodative monetary policy stance judged appropriate in an environment of moderating growth and low inflation.",
    "Facing sizeable capital outflows and a sharp fall in oil and commodity prices, the exchange rate depreciated substantially.",
    "The central bank deployed reserves; the effect on domestic interest rates was modest.",
    "Fiscal policy:",
    "Monetary policy:",
    "External policy response:",
    "Interest rates:",
    "Exchange rate and reserves:",
    "External shocks:",
    "**Cr16110**"
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