Real GDP to grow moderately at 4.2 pct this year

Malaysia's real Gross Domestic Production (GDP) is expected to grow at a moderate 4.2 percent 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 percent against 5.1 percent recorded in 2015.

"The growth will be underpinned by private investment growth of 5.6 percent and private consumption growth of 5.2 percent," 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 percent compared with a negative one percent 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 percent while private consumption expanded 6.0 percent.

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, in its policy mix.

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

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