Anwar has golden opportunity to go beyond short-term fixes and shouldn't waste it

The Malaysian PM is right to take a victory lap for his country's economic resurgence. It's time to tackle issues standing in the way of longer-term stability and growth.

- Bhavan Jaipragas

There is a noticeable pep in the messaging from Malaysia's Prime Minister Anwar Ibrahim and his government as they approach next week's budget.

And why not? Growth is expected to exceed 5 per cent this year, going beyond the upper end of official estimates, driven by foreign investments in semiconductors and a booming artificial intelligence-powered data centre sector.

Perhaps the strongest indicator of Malaysia's economic momentum is the ringgit, which has gone from being Asia's worst-performing currency in 2023 to the world's best performer against the US dollar in the three months to October.

The Kuala Lumpur Composite Index is sizzling too - up 12 per cent since the start of the year - while the initial public offering market is on track for 42 listings this year, compared with 32 in 2023.

Datuk Seri Anwar, who is also serving as Finance Minister, will no doubt take a victory lap when he delivers the Oct 18 budget.

He previewed this confidence at the Oct 7 Khazanah Megatrends Forum, one of the country's premier business conferences, highlighting that the government's structural reforms were "already proving effective, as evidenced by the ringgit's performance, the phenomenal rise in investments and the positive trajectory of our economic growth".

His government stands out as the first in five years to table a third consecutive budget - a stability unseen since 2018, following years of political turbulence which saw three prime ministers come and go without the chance to do the same.

Anticipation is high that Mr Anwar will use the budget to lock in these impressive gains.

Analysts believe he will leverage the feel-good factor to push the private sector to raise salaries more rapidly and boost the share of wages in the economy, likely by expanding the Singapore-style progressive wage model currently on limited trial.