KUALA LUMPUR, March 19 ― The Malaysian economy is expected to remain on a steady growth path in 2014 and 2015 with private sector-led domestic demand remaining the key growth driver.

Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said the economy will continue to benefit from the gradual global recovery.

In her statement in the Bank Negara Annual Report 2013, she said  the Malaysian economy had benefited from the earlier reforms and initiatives introduced, and which provided a conducive environment for private investment.

“Projected to register its fifth consecutive year of strong growth, the broad-based capital spending across the economic sectors and geographical areas reflects the ongoing efforts to transition towards becoming a higher value-added economy,” she added.

The household sector, Zeti said, has also remained resilient and private consumption activity is supported by sustained income growth and stable labour market conditions.

“As a highly open economy and an increasingly more liberalised financial system, Malaysia is significantly affected by external developments.

“Despite the increased capital flow volatility during the recent months, the domestic financial markets have remained orderly, and financial intermediation has not experienced any disruptions,” she added.

This, she said, is largely from the payoffs from the decade of reforms to develop a more resilient domestic financial system.

“Additionally, the high level of international reserves, the low level of external indebtedness and the balance of payments current account surplus continues to reinforce the strength of the Malaysian economy and its capacity to cope with external shocks,” she added.

Beyond the prevailing short-term volatility, Zeti said structural adjustments and economic transformation efforts currently being implemented, will strengthen the fundamentals and growth prospects over the medium term.

She also said as financial integration in the region deepens, central bank cooperation to enhance collective resilience was also strengthened further during the year.

“Cooperation has been strengthened in the area of cross-border surveillance, and in the development of an integrated crisis management framework to address pre-emptively, threats to regional macroeconomic and financial stability,” Zeti added.

She said financial resources available for crisis management have been, and will continue to be enlarged, through cross-border collateral arrangements and new bilateral swap arrangements.

“The Chiang Mai Initiative Multilateralisation (CMIM) is also being enhanced to strengthen the regional financial safety net.

“Cumulatively, these initiatives advance and strengthen the institutional arrangements and mechanisms, as part of the overall regional financial architecture to support regional stability,” she added. ― Bernama