KUALA LUMPUR: The Malaysian Institute of Economic Research (MIER) has revised upwards its gross domestic product (GDP) growth outlook for Malaysia to 5.4% this year, driven primarily by stronger domestic and external demand. MIER executive director Dr Zakariah Abdul Rashid (pix) said the revised outlook is higher than the earlier forecast of 4.8% due to the stronger-than-expected growth of 5.6% in first quarter (Q1) and 5.8% in Q2. “This is an upward revision by 0.6 percentage point from the July forecast, the second revision after the April forecast was revised upwards by 0.3 percentage point in July,” he said at a press conference on the Malaysian economic outlook for Q3 2017 today. The think-tank maintained the projected real GDP growth in a range of 4.7% to 5.3% for next year. On inflation, Zakariah said it is projected to rise to 3.8% this year, from 2.1% in 2016, due to higher oil prices and continued depressed ringgit. However, it is expected to moderate to 3% in 2018 as production capacity expanded. MIER anticipated crude oil prices to average at US$55 (RM234) per barrel this year and further improve to US$60 (RM255) per barrel in 2018. For the upcoming Budget 2018, MIER hopes the government will come up with moves to reduce individual income tax, and corporate and business taxes, to address the issue of rising cost of living. “This (issue of rising cost of living) is caused by insufficient income ... households find it difficult to meet expenditure. Therefore, something needs to be done to supplement the issue,” Zakariah said. He added that consumer confidence remained weak, as the consumer sentiment index (CSI) for Q3 continued to be below the demarcation level of 100 points. According to MIER’s consumer sentiment survey, which involved 1,023 households in Peninsular Malaysia, consumers are concerned about global and domestic uncertainties biting into the security of incomes and jobs. Nevertheless, Zakariah said the survey revealed that consumers have no plans to cut their spending despite their wariness, noting the CSI indicated that consumers are having ambitious spending plans, especially during festive celebrations. On another note, he said businesses are still optimistic in general, as MIER’s business conditions index (BCI) is still above the demarcation level of 100-point threshold of optimism. He said the index showed that businesses are optimistic on near-term prospects as well as on export demand, as indicated by the improvement in the indices for capacity utilisation, expected production and export sales compared with the previous quarter. Based on MIER’s business conditions survey, which involved 300 manufacturing firms in Peninsular Malaysia, companies are expecting improvement in the fourth quarter, in terms of performance.