Keynote address - Sasana Symposium 2026

1. The Gelam tree and renewal

Speaking at the Sasana Symposium on the theme of reforms for resilience, Governor Abdul Rasheed Ghaffour likened structural reform to the Gelam tree, which thrives in harsh conditions by shedding bark and renewing itself. Monetary policy is an important defence and the current stance fits the growth and inflation outlook, but as a demand tool it cannot fix underlying weaknesses; reforms invest in the economy's future, raising productivity, competitiveness and staying power. Malaysia reformed after the Asian crisis, again when investment slowed in the mid-2010s, and after the pandemic; the central bank's part is preserving macroeconomic stability so reforms can take hold, through steady prices, a healthy banking system and well-functioning markets, and it will keep doing so. The medium-term outlook stays favourable, with firm growth and manageable inflation.

2. Productive capacity and public finances

The latest reform phase has two pillars. On investment, the aim is not simply more but the right kind, bringing technology, better jobs and greater value; Malaysia approved 815 billion ringgit over two years, almost half of GDP, mostly in advanced manufacturing, semiconductors and digital technology. On fiscal capacity, phased-in targeted diesel subsidies, subsidy reforms, tax adjustments and a fiscal responsibility law cut the deficit from 6.2% of GDP in 2020 to 3.7% in 2025. Growth was 5.2% last year, the ringgit led regional currencies, and 4-5% growth, toward the upper end, is expected this year despite the energy shock. None of this happened by chance, he stressed: difficult choices were made early and in sequence. A 1.5 billion dollar global sukuk drew nearly five times the amount offered, at record-low spreads.

3. Where to go: jobs, skills and wages

He set out anchors for the next stage. First, make growth felt at home through better jobs: high-skilled employment rose from 27.5% to 30.1% of the total between 2019 and 2025, and the investment pipeline could create about 245 000 jobs, many of them higher skilled, yet over two thirds of workers hold low or mid-skilled roles. That calls for continuous upskilling, digital fluency, vocational training and STEM and AI education under the 13th Malaysia Plan, plus wages that reward productivity, minimum wage increases as a floor, and a more coherent social protection system that tackles the roots of vulnerability.

4. Value creation and a better financial sector

Second, move from extracting value to creating and retaining it: investment should leave behind stronger local firms, skills and technology diffusion, through research, design, engineering and programmes such as SemiconStart, and growth must stay sustainable given the country's rich biodiversity. Third, everyone has a role: the upcoming Financial Sector Blueprint 2027-2030 aims for finance that builds resilience to climate shocks, supports prosperity by channelling capital to productive firms, with Islamic finance as a force for change, and is future-proofed through proportionate regulation that does not curb innovation.

5. Co-creation and closing

The central bank is moving towards co-creation with banks, businesses and technology players, through platforms such as the climate change joint committee, the regulatory sandbox and iTEKAD, which will launch an employment initiative. Countries should stay ahead of the curve instead of solving yesterday's problems. Closing on Gelam bark that let Malay ships flex with the waves, he said resilience means adapting without losing one's bearings, and the task now is to turn stronger foundations into stronger incomes, investment into opportunity and resilience into progress that many people share.