KUALA LUMPUR, Nov 17 — Malaysia’s gross domestic product(GDP) is likely to grow between five per cent to 5.5 per cent in the fourth quarter of 2014 before moderating to 5.2 per cent next year, Alliance DBS Research said.

In a research note, Alliance said Malaysia’s growth performance is still considered healthy.

“Moving forward into 2015, some key items on our watch list are the ongoing fiscal consolidation reforms, including implementation of the Goods and Service Tax and also the review of the fuel subsidy mechanism,” it said.

The research house said real GDP growth was at a slower pace of 5.6 per cent in the 2014 third quarter, compared to a revised 6.5 per cent in the second.

In a separate note, RHB Research said in going forward, export growth is expected to moderate in the fourth quarter. I

Import growth is also expected to thread along the pace of exports during the period, albeit capped by moderating domestic demand.

“This will likely result in a comfortable trade surplus in the fourth quarter (third quarter 2014: +RM16.8 billion, second quarter 2014: +RM18.5 billion), which should translate into a further improvement in the current account surplus for the full-year.

“At the same time, the services account is projected to record a slightly smaller deficit in 2014, due to a smaller net payment for transportation charges.

“Also, the deficit in the income account is likely to narrow during the year, contributed by smaller repatriation of dividends by non-resident controlled companies during the year,” RHB said.

The research house also expects repatriation of salary by foreign workers to drop during the year and as a result, RHB expects the current account surplus of the balance of payments to widen to RM58.0 billion or 5.8 per cent of gross national income (GNI) in 2014, compared with a surplus of RM39.9 billion or 4.2 per cent of GNI in 2013.

“Meanwhile, the pick-up in the current account surplus will likely contribute to a build-up in the country’s foreign exchange reserves and  provide some underlying support to the fundamental value of the ringgit, which is susceptible to fluctuations in the short term due to volatile capital flow,” RHB said. — Bernama