Malaysia is charting a path towards robust economic growth, a smaller fiscal deficit, and stable prices, bolstering its currency and investment appeal, Finance Minister II Datuk Seri Amir Hamzah Azizan told Bloomberg.

In an interview during the IMF and World Bank meetings in Washington recently, Amir emphasised the ringgit’s potential for strengthening as "the ringgit will find the natural level commensurate to the growth prospect of the country.”

He noted that reduced interest rate differentials with the US should also support the currency’s growth.

This year, the ringgit has been the best-performing currency among emerging markets, although recent gains have moderated.

Investors are drawn to Malaysia’s strong economic growth, which has outpaced expectations, and a steady interest rate policy while many regional counterparts have opted for cuts.

"Just because everybody has cut, doesn’t mean we have to cut,” Amir was quoted as saying, praising Bank Negara Malaysia’s efforts to manage inflation while maintaining "very accommodative” conditions.

Prime Minister Datuk Seri Anwar Ibrahim’s administration is focused on diversifying Malaysia’s economic growth while aiming to cut the budget deficit to below 3 per cent of GDP by 2028.

Anwar, who also serves as finance minister, has introduced a record Budget 2025 that plans for higher taxes and subsidy cuts to reduce the fiscal deficit from 4.3 per cent of GDP in 2024 to 3.8 per cent in 2025.

His vision involves transforming Malaysia into a global tech hub, a strategy that’s drawing interest from industry giants like Microsoft, Nvidia, and Amazon.

Part of the fiscal reform includes ending blanket subsidies on RON95 petrol by May 2025, which Amir said will save the government roughly RM8 billion annually.

A two-tiered pricing system could see wealthier Malaysians paying market rates, while others continue to benefit from subsidies, a measure intended to minimise inflation and avoid public backlash.

Inflation, anticipated to average 1.5 per cent to 2.5 per cent in 2024, is expected to remain between 2 per cent and 3.5 per cent next year.

Amir underscored the administration’s cautious approach to maintaining stability amidst domestic reforms and external risks.

Additionally, Malaysia’s export-driven economy is vigilant against potential impacts from the ongoing US-China rivalry and China’s economic slowdown.

The government is investigating potential Chinese product dumping in Malaysia, with Amir indicating a willingness to take protective action if needed.

Malaysia’s neutrality in global conflicts has also benefitted its economy by positioning it well within realigned global supply chains, he added.

"It gives us the best chance to ride it out,” Amir said of the rising geopolitical tensions.