Posted on 28 Jan 2014
Malaysia’s economy is expected to grow at 5.5% in 2014 due to expected fiscal consolidation measures to rein in the Budget deficit, says the Malaysian Institute of Economic Research (MIER).
It said on Tuesday other factors were the generally tight monetary conditions and more downside risks, especially on the domestic front.
MIER said however, external demand was expected to provide strong support for growth, especially with the strong expansion in the world economy, although global risks remain on the horizon.
“These include risks arising from volatility of capital flows and deflation in key advanced economies, especially with inflation running below many central banks’ targets,” it said.
“As for 2015, real GDP growth is projected to move away nicely along the potential output growth path of between 5.5% and 6%,” it added.
The factors were economic efficiency and innovation, especially with expected stiffer competition in both product and services markets, less market distortions and imperfections, greater labour market flexibility and more importantly productivity gains as well as more efficient allocation of scarce resources.
