KUALA LUMPUR, Dec 4 ― Malaysia's economy is expected to expand 5.3 per cent next year from an estimated 4.7 per cent this year, Standard Chartered said today.
External demand is expected to pick up next year, mitigating the expected slowdown in domestic demand, said the international bank. Private consumption may moderate next year due to higher inflation, subsidy cuts and high household leverage, said Standard Chartered in its 2014 global focus on “Rising East, Emerging West” Report.
Its growth forecast was in line with the government's projection of 5.0-5.5 per cent gross domestic product (GDP) growth for next year.
“GDP growth was 4.5 per cent in nine months of 2013 and appears to be on track to meet our full-year forecast of 4.7 per cent,” the bank said.
The report said Malaysia's labour market will remain healthy, supporting wage growth and consumption, while the manufacturing sector is likely to strengthen, thanks to the pick-up in external demand.
“This should support wage growth in the sector, which accounts for about 17 per cent of total employment and saw a wage increase of about 7.6 per cent in nine months of this year, despite a softness in manufacturing, ”said Standard Chartered.
Domestic factors are likely to be more supportive of the ringgit next year, the bank said. — Bernama
