Report: Malaysia's economy to grow 5-6% IN 2015
KUALA LUMPUR: Malaysia's economic growth momentum in 2015 is expected to remain resilient and register a growth of between 5% and 6%, said the Ministry of Finance (MOF).
The growth would be private-led, in line with the government's effort to strengthen the private sector's role in the economy, as well as, driven by improving external demand and resilient domestic economic activity.
"On the supply side, all economic sectors are expected to record positive growth next year with the services and manufacturing sectors remaining the major contributors," said the ministry in its 2014-2015 Economic Report.
The report is issued in conjunction with the tabling of 2015 Budget in Parliament today by Prime Minister Datuk Seri Najib Abdul Razak, who is also Finance Minister.
The report said inflation was expected to temporarily increase to between 4% and 5% next year largely due to the Goods and Services (GST) implementation and spillover effect from the fuel subsidy reduction in October.
"Nevertheless, the impact of higher inflation on consumption is expected to be temporary and will eventually taper off after a few months of the GST implementation.
"In addition, higher export earnings are expected to boost business earnings and household income and hence mitigate the impact of higher inflation on domestic demand," it said.
Consequently, nominal Gross National Income (GNI) per capita is expected to increase 8.1% to RM37,486 while income per capita in purchasing power parity (PPP) terms was expected to increase 2.4% to US$23,512.
Malaysia's external position is expected to remain strong next year in line with improved prospects for global growth and trade, nevertheless, trade surplus was expected to narrow to RM74.1 billion from RM85.6 billion in 2014 as import growth accelerated and outpaced exports.
MOF also said Malaysia was now well-placed to gain further from the gradual global recovery with a more broad-based growth due to strong macroeconomic fundamentals such as a diversified economy, strong international reserves and healthy financial system to support economic activity.
For 2014, nominal GNI is estimated to expand 10.2% to RM1.049 trillion in 2014, surpassing for the first time, the RM1 trillion mark while per capita income will increase 8.9% to RM34,682.
"In terms of PPP, per capita income is expected to increase 2.2% to US$22,958," it added. – Bernama