Real GDP to grow moderately at 4.2% this year

KUALA LUMPUR: Malaysia’s real Gross Domestic Product (GDP) is expected to grow at a moderate 4.2% this year, driven by private sector expenditure.

Malaysian Institute of Economic Research (MIER) Executive Director Emeritus Professor Dr Zakariah Abdul Rashid said domestic demand would likely grow by 4.5% against 5.1% recorded in 2015.

“The growth will be underpinned by private investment growth of 5.6% and private consumption growth of 5.2%,” he said at the 21st Corporate Economic Briefing organsied by MIER here today.

Zakariah said public sector investment would pick up in the short-term, growing at 1.4% compared with a negative 1% in 2015.

“Public sector expenditure next year is expected to be influenced by continuing fiscal consolidation as oil prices are expected to remain depressed,” he said.

In 2015, private investment grew 6.4% while private consumption expanded 6.0%.

He said Bank Negara Malaysia would manage the tight liquidity condition in favour of stimulating production and other economic activities by maintaining a larger proportion of shorter-maturity monetary instruments such as money market borrowings and repos (repurchase agreement), in its policy mix.

As for 2017, Zakariah anticipated that real GDP would increase moderately, registering a growth of between 4.5-5.5%.

He said domestic demand, which would increase 5.0% next year, would continue to drive the Malaysian economy.

– BERNAMA

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