Malaysia emerges amongst the ASEAN-5 as the economy that will likely experience the fastest growth in 2014, according to RHB Research Institute.
ASEAN-5 comprises Indonesia, Malaysia, the Philippines, Singapore and Thailand.
Malaysia's real gross domestic product (GDP) is expected to increase to 5.4 per cent in 2014, after recording a growth rate of 4.7 per cent in 2013.
Private investment, mainly through domestic demand, will continue to propel this growth, even though increasing at a more moderate pace as a result of rising costs.
"An improvement in external demand for the country's exports, will also contribute to the country’s increased growth," the institute noted its economic report today.
Real exports are set to pick-up pace to 4.5 per cent in 2014, from -0.3 per cent in 2013, due to steady demand from the developed economies and sustained growth in the regional economies.
Projected consumer spending will be around 6.0 per cent in 2014, after increasing at a relatively strong pace of 7.6 per cent in 2013.
Consumer spending will likely be sustained, underlined by stable employment conditions, rising consumerism, high savings, as well as continued wage growth, said the report.
Fiscal deficit will be reduced to 3.5 per cent of GDP in 2014, compared with 3.9 per cent in 2013.
The reduction in the country’s fiscal deficit is attributed to increased revenue collection, stronger economic growth, efficient spending and the implementation of expenditure reforms.
Inflation may increase to between 3.0-3.4 per cent in 2014, up from 2.1 per cent in 2013, taking into account the expected fuel price increase in the second half of 2014, forecasts the institute.
Adapted from BERNAMA, 30 April 2014