KUALA LUMPUR, Dec 6 — Malaysia's exports is expected to grow 2.9 per cent over 2012 and increase six per cent next year as the global economy continues to improve in coming months, says an economist with the Institute of Chartered Accountants in England and Wales (ICAEW).

Douglas McWilliams, the ICAEW Chief Economist and Centre for Economics and Business Research Ltd Executive Chairman, said the economy is expected to be brighter next year with the recovering global economy and exports growth.

 “We are predicting exports of RM723 billion for 2013 (2.9 per cent growth over 2012) and RM766 billion for 2014 (six per cent growth), he said.

He said the return of growth in the Eurozone and stronger expansion in the United States will offer countries in the Asean region space to enact necessary economic and social reforms.

 “This, in conjunction with China's soft landing, will mean countries like Malaysia can put its initiatives to further strengthen international trade and investment links,” he told reporters on the sidelines of the ICAEW Economic Insight Report presentation here today.

The ICAEW also foresees 2014 as a transition and productive year for Malaysia due to consolidation of government finances, subsidy reduction and increase in taxation.

The ICAEW report said the higher demand from Eurozone and the US for Asean exports will help offset lower demand from China and Japan.

McWilliams said while the nascent recovery will not dramatically increase Asean export levels, it will help ease the drag on export growth the region has been feeling over the past few years.

 “However, rising debt levels approaching the critical level of 60 per cent of gross domestic product which is treated by financial markets as a trigger point in Southeast Asian countries like Malaysia and Thailand are a concern,” he said.

McWilliams said he has full confidence in the capability of Bank Negara Malaysia as the central bank is considered as one of the best in the world in terms of management.

The report also warns that if the US Federal Reserve incoming Chairman, Janet Yellen, is less eager than expected to maintain a loose monetary policy, investors may overreact.

 “In Asean, this could result in selling assets, including domestic Asean currencies,” he added.

The ICAEW Report titled “Economic Insight: South East Asia” is produced by the Centre for Economics and Business research, an ICAEW's partner and economic forecaster.

Commissioned by the ICAEW, the report provides its 140,000 members with a current snapshot of the region's economic performance.

The report undertakes South East Asian economies quarterly review, with a focus on five countries — Indonesia, Malaysia, the Philippines, Singapore and Thailand. — Bernama