MY VARTHAGAM : MALAYSIAN ECONOMY THE FASTEST GROWING AMONG ASEAN-5

MY VARTHAGAM :  MALAYSIAN ECONOMY THE FASTEST GROWING AMONG ASEAN-5

KUALA LUMPUR: Malaysia stands out among the Asean-5, as it is the only economy that will likely experience faster growth in 2014, says the RHB Research Institute.

Asean-5 comprises Indonesia, Malaysia, the Philippines, Singapore and Thailand.

Malaysia's real gross domestic product (GDP) is to expand at a faster rate of 5.4% this year, after moderating to +4.7% last year.

"Domestic demand led by private investment will continue to be a key driver of growth, albeit expanding at a more moderate pace due to rising costs.

"This will likely be aided by an improvement in external demand for the country's exports, RHB Research Institute said in the economic outlook report, here today.

Real exports are set to pick up pace to +4.5% in 2014 from -0.3% last year due to steady demand from advanced economies and sustained growth in the regional economies.

Consumer spending is projected to grow at a more moderate pace of 6.0% this year, after expanding at a relatively strong pace of +7.6% in 2013.

"It will likely hold up, underpinned by stable employment conditions, rising consumerism, high savings, as well as sustained wage growth," the RHB Research Institute said.

The government remains on track to reduce its fiscal deficit further to 3.5% of GDP this year from last year's 3.9%.

This will be driven by sustained revenue expansion, stronger economic growth, more efficient spending and the implementation of expenditure reforms.

Inflation might trend up at around 3.0-3.4% this year, from +2.1% last year, after factoring in another round of fuel prices hike in the second half of 2014, the research institute said.

It also said the central bank was likely to increase the overnight policy rate (OPR) by 25 basis points towards the late third quarter 2014 to 3.25%, after keeping it unchanged at 3.0% for more than two years. – Bernama