KUALA LUMPUR: Malaysia’s economic growth will be affected should the Palestine-Israel conflict escalate further into a conflict involving Arab countries in the region, the Economy Ministry said.
If the scale of the conflict widened, it would have a significant impact, especially in terms of rising oil prices and trade supply chain disruption, the ministry said.
“This would have a knock-on effect on global inflation and economic growth in general, and Malaysia’s economic growth in particular,” it said in an answer to Senator Noorita Sual’s oral question in the Dewan Negara, which was posted on the Parliament website yesterday.
Noorita wanted to know the economic implications or effects following Malaysia’s unwavering stance on the Palestine issue.
The Economy Ministry said that if the conflict were contained to Palestine and Israel, there would not be any direct economic impact on the world in general as the two are not among the world’s top trading nations.
Citing figures from the United Nations Conference on Trade and Development (Unctad), it said Israel’s Gross Domestic Product was US$394.2 billion, which was equivalent to 0.44 per cent of the global GDP, while Palestine’s GDP stood at US$15.7 billion (0.02 per cent).
Israel’s total trade amounted to US$180.9 billion, equivalent to 0.4 per cent of world trade, while Palestine’s stood at US$9.5 billion (0.02 per cent).
The Economy Ministry said Palestine was Malaysia’s 187th largest trade partner with total trade amounting to RM13.7 million in 2022.
Malaysia’s main exports to Palestine are palm oil and palm oil-based agriculture products, palm oil-based manufactured products and rubber products, while imports include dates, olive oil, and electrical and electronic products.
Meanwhile, the Economy Ministry said that as a show of humanitarian support for Palestine, there are Malaysian individuals who have chosen to boycott companies said to be linked to Israel.
“The boycott does not have a significant effect on the national economy in view that the food and beverage (F&B) subsector’s overall contribution to our GDP is small at 2.4 per cent.
“Nonetheless, the government is aware that the boycott is affecting workers involved in the sector,” it said.
The ministry said an estimated 50,000 workers are employed by companies linked to the F&B sector boycott.–Bernama
