Malaysia's real Gross Domestic Product (GDP) is poised to expand at a stronger pace of 5.0-5.5 per cent next year boosted by strong economic fundamentals and budget measures to further strengthen the economy.
Domestic demand is expected to remain strong and remain the driver of growth amid a better external outlook.
The government fiscal deficit and debt is expected to decline to 3.5 per cent and 54.7 per cent of GDP, respectively, as revenue performance outpaces growth in expenditure.
Total Federal government expenditure will remain stable at RM262.2 billion while revenue is anticipated to be higher at RM224.1 billion, says the Finance Ministry in its Economic Report 2013/2014 released today.
The report is issued in conjunction with the tabling of the 2014 Budget today by Prime Minister Datuk Seri Najib Razak, who is also Finance Minister.
On the external front, the current account balance is expected to remain in surplus at RM23.9 billion despite increasing investment-driven imports.
Against this backdrop, the nominal Gross National Income per capita is expected to increase 6.2 per cent to RM34,126 in 2014 from RM32,144 this year.
In purchasing power parity terms, per capita income will grow to US$17,173 from US$16,743 recorded in the same period.
The Finance Ministry also said private investment is likely to record a double-digit growth driven by the accelerated implementation of ongoing Economic Transformation Programme projects.
Investments in the export-oriented manufacturing and services industries, as well as, agro-based industry is expected to increase.
Public investment will be largely sustained by capital outlays of non-financial public enterprises in oil and gas, utilities, transport and telecommunications.
Private consumption will also remain resilient supported by higher household income and stable labour market conditions.
On the supply side, Finance Ministry said growth will be supported by broad-based expansion across all major sectors.
The services and manufacturing sectors are expected to expand at a stronger pace given the resilient domestic consumption and higher tourist arrivals in conjunction with Visit Malaysia Year 2014, and a firmer recovery in external demand for manufactured goods, particularly electrical and electronic products.
The strong performance of the construction sector is expected to continue largely supported by the civil engineering and residential segments.
Growth in the agriculture and mining sectors is envisaged to expand further supported by higher output of crude palm oil and crude oil.
Meanwhile, inflation is expected to remain manageable with the consumer price index averaging between two and three per cent in 2014 following the change in fuel prices in September 2013 and generally stable commodity and food prices.
Labour market conditions is projected to be stable with the unemployment rate remaining low at 3.1 per cent.
Employment in the export-oriented industries, as well as, the trade and tourism-related subsectors will benefit from the upturn in external demand and increased tourist arrival, the Ministry said.-- Bernama