KUALA LUMPUR, April 30 — 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 per cent this year, after moderating to +4.7 per cent 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 per cent in 2014 from -0.3 per cent last year due to steady demand from the advanced economies and sustained growth in the regional economies.

Consumer spending is projected to grow at a more moderate pace of 6.0 per cent this year, after expanding at a relatively strong pace of +7.6 per cent 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 per cent of GDP this year from last year’s 3.9 per cent.     

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 per cent this year, from +2.1 per cent 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 per cent, after keeping it unchanged at 3.0 per cent for more than two years. — Bernama