The depreciation of the ringgit to the United States’ dollar has left many worried, but Malaysian Employers Federation (MEF) president, Datuk Syed Hussain Syed Husman, says it can boost the tourism industry in Malaysia.
He also said the future is not bleak as Bank Negara Malaysia (BNM) expects the gross domestic product (GDP) growth to be on track for 2022 at between 5.3 per cent and 6.3 per cent, up from 3.1 per cent last year.
Since January this year, the ringgit has depreciated by more than 10 per cent against the dollar. It is now RM4.65 against the greenback.
“The drop in ringgit value against the US dollar is mostly due to external factors, such as the threat of an interest rate hike by the US Federal Reserve, and not necessarily because Malaysia has weak economic fundamentals,” said Syed Hussain.
“However, the weaker ringgit will spur the arrival of foreign tourists, which in turn, will contribute to higher growth in the tourism, hotel, and airline sectors.”
Syed Hussain’s optimism is based on Tourism Malaysia’s recent report that overseas tourist arrivals had surpassed earlier projections of two million visitors since the country’s international borders opened in April this year. These tourists have spent RM8.6 billion in the past five months.
In light of this, Tourism Malaysia revised its projections and now expects 9.2 million tourist arrivals, bringing in RM26.8 billion in tourism-related revenue for the year.
Malaysia also has the potential to become an entertainment hub after several big names, such as Keshi, Jay Chou, and Blackpink, announced their concert dates in the country in the coming months.
These concerts bring tourism money from food and beverage, accommodation, transport, and retail. The country will also benefit from the international spotlight from hosting these events.
He said these events would help stimulate the Malaysian economy.
Separately, when asked about the Department of Statistics Malaysia’s (DOSM) Salaries and Wages Survey 2021 that was released yesterday, MEF said it was not surprising that the median salary shot up by 9.1 per cent.
According to DOSM, Malaysians now earned a median salary of RM2,250. It was RM2,062 in 2020. While that may seem like good news, we are still down from the 2018 (RM2,308) and 2019 (RM2,442) levels.
“The increase in the median monthly salaries and wages was partly contributed by the continuous resumption of economic and social activities during the second half of 2021 after the country went through various lockdowns due to Covid-19,” said Syed Hussain.
“It is expected that salary increase will be higher this year due to the recovery in the economy and the increase in the national minimum wage to RM1,500 in May.”
Addressing the drop in salary compared to 2018 and 2019, Syed Hussain said this was due to factors such as the ongoing Russia-Ukraine conflict, soaring inflation, supply chain disruptions, and political uncertainty.
