KUALA LUMPUR, Jan 23 — Malaysian Institute of Economic Research (MIER) said Malaysia’s gross domestic product (GDP) should grow by 5.6 per cent last year, with an estimated five per cent growth in its last quarter.

Executive director Zakariah Abdul Rashid said the fourth quarter of 2017 showed no signs of slowing down and was, in fact, supported by manufacturing activities and domestic demand.

“Domestic demand grew faster than anticipated at five per cent year-on-year (yoy).

“Buoyant consumer spending is attributable to a stable job market, container core inflation and a strengthening ringgit, as well as several government measures to boost disposable income in the Budget 2018,” he said at a media briefing.

According to MIER’s Business Conditions Index (BCI) fourth quarter analysis, businesses in the country remained “optimistic” and above its 100-point threshold optimism, although it marginally fell by 1.6 points from the previous quarter.

(The optimistic point is classified as 100 points and above.)

Production output, he said, was on a “positive mode”, adding that several industries like food and beverage, tobacco, chemical and rubber were among others that experienced a “fair growth.”

As for its Consumer Sentiment Index (CSI) for the same fourth quarter of 2017, the situation improved by 5.5 points to 82.6 from the previous quarter.

“The CSI remains weak as the Index stays below the demarcation level of 100 points,” Zakariah said.

This, he said, was because households ended the year on a cautious note.

Based on the report, he said, consumers were cutting down on their plans to shop even “until the early months of 2018.”

As for retail activities, Zakariah said the overall Retail Trade Index (RTI) also experienced a lower growth.

He said the nation’s RTI settled 31.7 points lower to 85.2 points in the fourth quarter of 2017.

“But then again, it can be argued that consumers are being cautious with their spending because they are grappling with the rising living cost,” he said.

The automotive industry, Zakariah said, recorded higher optimistic points of 141.7 in the fourth quarter from 106.5 points in the quarter before.

“The stronger car sales can be attributed to the attractive year-end promotional events and new car launches,” he explained.

Another study on the tourism market, he said, showed that the industry dipped 29.9 points to 95.6 points due to various reasons, including lower occupancy rate and inactive promotions.