KUALA LUMPUR: World Bank lead economist for Malaysia Apurva Sanghi believes Malaysia can achieve high-income nation status by 2027, if the ringgit sticks to current levels.

According to Bernama, Sanghi said Malaysia's per capita output growth, which is used to measure welfare, is 12 per cent higher than the pre-pandemic level and outperforms its Asean peers.

"This means that high income status for Malaysia is within reach - based on our assumption of the US dollar against the ringgit at the 4.54 level and with an average growth rate of 4.3 per cent, we expect Malaysia to reach the high income nation status by 2028.

"If the US dollar and ringgit exchange rate stays at the current level of about 4.20, then the high income goal (could be reached) a year earlier in 2027," he said, as quoted by Bernama.

Sanghi explained that high income nation is not the same as a high development nation, and that there is always a risk of reversal.

World Bank upgraded Malaysia's economic growth forecast to 4.9 per cent in 2024 from its initial 4.3 per cent forecast set in April on improved domestic and external factors.

On the ringgit, Sanghi said its recent strong performance reflected improved investor sentiment due to three factors - US monetary policy easing, stronger domestic economic data in the second quarter and important reforms by the government.

"I believe that all these factors have bolstered investor confidence and increased demand for the ringgit. Let's not forget that the highly specific targeted initiatives by the government and Bank Negara Malaysia's effort to repatriate funds and improve the functioning of the currency market have further supported the ringgit," he added.