MIER forecasts 5%-5.5% Malaysia GDP growth for 2014

by **Cals** Tue 26 Nov 2013, 18:17

Business & Markets 2013

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Tuesday, 26 November 2013 18:11

KUALA LUMPUR (Nov 26): Malaysian Institute of Economic Research (MIER) has forecasted Malaysia's gross domestic product (GDP) growth at 5% to 5.5% in 2014.

MIER said in a report today that the forecast is in anticipation that the government will spend less to preserve public finances. MIER had distributed its report to reporters at MIER's National Economic Outlook Conference earlier today.

“Growth outlook for 2014 is projected to be between 5% and 5.5%, on account of expected fiscal belt-tightening measures to rein in budget deficit, generally tight monetary conditions and also enhanced downside risk,” said MIER.

In the third quarter of 2013 (3Q13), the country's GDP had grown 5% from a year earlier. MIER attributes the growth to robust domestic demand, especially in terms of private investment and consumption.

Following the 3Q13 numbers, MIER has maintained its full-year forecast of 4.8% GDP growth in 2013. This takes into account rising consumer inflation, tighter credit conditions and moderation in financing, amid the improving global environment.

MIER's forecast compares with Bank Negara Malaysia's 2013 GDP growth forecast of 4.5% to 5%.

Brighter prospects in Europe will be closely watched. MIER executive director Dr. Zakariah Abdul Rashid said that Europe will exit recession in 2014 and therefore may encourage economic growth in Malaysia.

“However, the two Asian giants (China and India) are moderating (in growth). We have already factored in the moderation of the Asian economy, so overall, 2014 will be slightly better than 2013,” he said.