Economist: Malaysia's economic growth to rise to 5.4pc

KUALA LUMPUR: Malaysia's economic growth is set to accelerate to 5.4 per cent in 2014 against the 4.7 per cent recorded last year, and buttressed by continuous domestic demand as well as a further recovery in exports.

RHB Research Institute Sdn Bhd's executive-director cum chairman Lim Chee Sing in expressing confidence over the economy, said improved economic prospects in the Eurozone countries and the United States would support growth.

The economist said domestic consumption, which accounted for 50.7 per cent of the gross domestic product (GDP), will receive a boost from favourable market conditions during the year.

"But the consumption growth will moderate slightly due to the tightening of policies to reduce household debt and cool down property speculation, as well as the high fuel prices due to subsidy rationalisation.

"The impact will be there. The growth will moderate but not fall off the cliff," he told reporters here today after the signing of a strategic partnership agreement between RHB Investment Bank Bhd and Taiwan-based, SinoPac Securities.

Malaysia's economic growth of 4.7 per cent in 2013 in contrast to 5.6 per cent the previous year, was supported by private sector demand and higher exports, despite lingering fiscal uncertainties.

For the fourth quarter, the economy expanded by 5.1 per cent, which was above the 4.8 per cent expectation of economists, underpinned by the stronger manufacturing and services sectors.

Private consumption growth remained high in the fourth quarter although the expansion pace moderated.

On deficit, Lim said Malaysia would not fall into a twin-deficit situation as the current account balance is currently at a surplus level, and would also be backed by the continuing export recovery.

"We have had only a prolonged deficit. But the fiscal deficit is actually coming down and is now four per cent of the GDP. The government's objective is to bring it down to 3.5 per cent in 2014.

"As long as the government continues with fiscal reform, it will improve the situation," he added.

 BERNAMA

New Straits Times

Monday 17 February,2014.