KUALA LUMPUR, Aug. 8 (Xinhua) -- The Malaysian economy is recovering strongly from the COVID-19 disruptions in 2021 and early 2022, the ASEAN+3 Macroeconomic Research Office (AMRO) said Monday.

Protected by its high vaccination rate, continuing nationwide inoculation program, and adequate healthcare capacity, Malaysia has progressively reopened its economy despite the resurgence of infections by the Omicron variant in early 2022, AMRO said in a report.

It said the Malaysian economic growth should firm up further with the country's transition to the endemic phase of COVID-19 from the beginning of April.

In this respect, it said accommodative policy settings could be recalibrated to build more buffers against future shocks and safeguard financial stability.

According to the report, the Malaysian economy is on track to expand by six percent in 2022 after growth firmed up in the first quarter on the back of a strong rebound in private consumption and buoyant exports.

Meanwhile, Malaysia's headline inflation is set to increase moderately to three percent in 2022 from 2.5 percent in 2021, reflecting the partial pass-through of higher global food and energy prices to consumer prices.

AMRO also highlighted that robust trade, strong foreign investment inflows, and a special drawing right allocation from the International Monetary Fund have allowed the Malaysian Central Bank to build up its reserves buffer in 2021.

The improvement in the reserves position has strengthened the bank's capacity to withstand volatility shocks in capital flows, it added. Enditem

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