Malaysia must avoid 'boom-bust' cycles to finally claim Asian Tiger status, central bank governor says

Malaysia is working toward having the "the right ingredients" to finally claim "Asian Tiger" status, but must avoid the traps of widening inequality seen elsewhere.

That's according to Abdul Rasheed Ghaffour, the governor of the central bank of Malaysia, who believes the southeast Asian country must avoid a "boom-bust cycle that has happened before."

In the boom years of the 1990s, Malaysia's growing economic prowess gave the country hope that it would transform into an "Asian Tiger," joining the informal club of Asia's four economic powerhouses that saw spectacular growth; Hong Kong, Singapore, Taiwan and South Korea.

The country was long tipped to be number five. That did not materialize, largely thanks to the 1997 Asian financial crisis. But it may be a case of better late than never, thanks to better-than-expected economic growth this year.  

"We initially projected to grow by 4 to 5 percent," Ghaffour told CNBC's Karen Tso at the IMF annual meetings in Washington, D.C., this week. In the first three quarters of this year, Malaysia recorded 5.1% GDP growth, exceeding its projections, he said, with the central bank now expecting growth to be between 4.8% and 5.5% for the whole of 2024.

Ghaffour is both "aspirational" and "cautious" with the newfound confidence.  

"It's more of sustainable, kind of, growth that we want, quality growth that we want. And also in terms of growth with less inequality. So these are the things we would like to have, so then you have the right ingredients to take us through to become the Asian tigers," he told CNBC.

A glance at inequality rates across the established Asian Tigers sheds light on his concerns.

According to a study by Oxfam released last year, Hong Kong's poorest make 57.7 times less