“The market did not really take into account that we have already restructured our economy, wherein the services sector now constitutes some 55% of our economy while the manufacturing sector is 25%,” Zeti told a press conference here yesterday.
“Therefore, 80% of our economy is not about oil and gas. Granted, we are affected to a certain extent when oil prices come down, but we are not devastated, and as a result, we are able to manage this to grow between 4% and 5%. In fact, in 2015 we had a growth of 5%,” she said.
She stressed that the country’s economy had successfully diversified itself long ago.
“It is the same with government finances. Previously, 40% of government revenue was from oil and energy, but now, the Government has introduced reforms to remove subsidies and this is only now 20% and reduced by half,” Zeti said.
Meanwhile, she expects the ringgit to more accurately reflect the country’s strong fundamentals over the medium term.
“Our fundamentals are now that we have a current account surplus and we have an inflow of foreign direct investments (FDIs) in our current account. Malaysia is a country that has always received FDIs for more than a hundred years,” she said.
“This has continued till now and we are a profit centre for investors. Having these two surpluses has supported our currency, and also our reserve levels are very healthy,” she added.
Zeti also said that Malaysia had a very solid banking sector that intermediates all sorts of financial flows.