KUALA LUMPUR (March 20): Bank Negara Malaysia released its Annual Report 2023 on Wednesday, together with two other flagship publications — Economic and Monetary Review 2023, and Financial Stability Review for 2nd Half 2023 — in which the central bank shared its assessments on the nation's economy and financial system, current and potential risks, and actions taken to manage them.

Here are 10 key charts from the documents:

1. BNM maintained its forecast for Malaysia's economy to grow by 4-5%, from 3.7% in 2023, underpinned by domestic expenditure, potential exports recovery. — BNM sees economy expanding 4%-5% in 2024 amid resilient domestic expenditure, improved external demand

2. The ringgit, which depreciated by 3.9% against the US dollar and by 3.7% against major trade partners in nominal effective terms in 2023, was the second worst performing currency of the year. The central bank cautioned that the road ahead may still be bumpy, despite expectations of easing pressure on the ringgit as the global monetary tightening cycle may have peaked. — BNM: Ringgit fundamentally undervalued, will remain vulnerable to advanced economies' monetary policy trajectory

3. Headline inflation is expected to stay moderate, with CPI forecast to rise 2-3.5% in 2024 from 2.5% in 2023. — BNM expects inflation to stay moderate in 2024 amid muted pressures

4. BNM is expecting Malaysia’s current account surplus in the balance of payment to improve this year following a sharp decline to a 26-year low in 2023. Current account surplus, as a proportion of economic output, may rise to 1.8%-2.8% from 1.2% in 2023, on higher goods surplus amid lower deficit in services account. — BNM projects current-account surplus to improve this year after hitting 26-year low in 2023

5. Unemployment rates have declined to pre-pandemic levels, reaching 3.4% in 2023. The central bank anticipates the unemployment rate to stabilise around its historical average of 3.3% in 2024, a level economists generally consider as full employment. — Wages to increase further in 2024, jobless rate to stay stable, says BNM

6. Select high-touch services subsectors, particularly the food-and-beverages, accommodation, and wholesale-and-retail trade, were major drivers of overall employment growth in 2023. — Wages to increase further in 2024, jobless rate to stay stable, says BNM

7. Gross impaired loan ratio inched towards pre-pandemic average, while Malaysian banks remain well-capitalised to absorb unexpected shocks and support financial intermediation in the economy, with capital buffers of RM142.6 billion, in excess of regulatory minimum. Liquidity and funding positions of the banking system also remained strong and well above the regulatory minimum. — BNM: Malaysia’s banking system remains well-capitalised, resilient against liquidity shock

8. Banks' earnings moderated with higher funding costs narrows interest margins — BNM: Malaysia’s banking system remains well-capitalised, resilient against liquidity shock

9. The National Scam Response Centre (NSRC) attended to 66,997 calls on online financial scams from the public in 2023, more than five times 2022's tally of 12,253 calls. — Calls from public about online scams jumped five-fold in 2023, says BNM

10. BNM received 317,435 suspicious transaction reports (STRs) from reporting institutions in 2023, up 31% from the 242,914 STRs in 2022. The reporting institutions included financial institutions, non-bank financial institutions and designated non-financial businesses and professions. — Institutions reporting to BNM flagged 31% more suspicious transactions in 2023

Don't miss the other highlights of the BNM Annual Report 2023. Read the articles here.