World Bank predicts Malaysia to grow by 4.4 pct in 2016, 4.5 pct in 2017

The Malaysian economy is likely to grow by 4.4 percent in 2016, ticking marginally higher in the year afterwards, by 4.5 percent, reports from the World Bank prediction showed Thursday.

The outlook reflects a gradual deceleration in private consumption in Malaysia due to softening of the labor market and continued adjustments to fiscal consolidation. Besides, private investment is also expected to slow down as commodity prices and global economic growth remain subdued, the World Bank’s Malaysia Economic Monitor, launched in Kuala Lumpur on Thursday, stated.

Further, the report also mentioned the key risks that are facing the Malaysian economy. Instability in commodity prices amid growing uncertainty over the economy’s growth trajectory are the key risks that are likely to impact Malaysia’s exports.

"Fiscal consolidation remains on track despite lower oil-related revenues achieved through reduction in the government’s operating expenditures and the implementation of the GST in April 2015," the World Bank said in its report.

The Malaysia Economic Monitor includes a special focus on the strategic relevance of trade agreements that can help Malaysia implement key economic reforms needed to accelerate the country’s transition to high-income status.

Meanwhile, the World Bank also pointed out the new generation of regional trade agreements, including the Regional Cooperation Economic Partnership (RCEP), Trans-Pacific Partnership (TPP) and European Union Free Trade Agreement (EU-FTA), will shape trade and investment over the next decade.