The World Bank has raised its 2017 growth estimate for Malaysia’s economy to 5.8 percent, which would be the highest annual expansion since 2014, buoyed by burgeoning domestic demand and an improved labor market, it said on Thursday, Reuters reported.
The lender had projected a growth of 5.2 percent in October, and this is the third time it has revised the growth forecast for Malaysia this year.
Much of the momentum will carry through to next year at a growth rate of 5.2 percent for 2018, according to its Malaysia Economic Monitor report launched on Thursday.
“Accelerated growth has been fueled by strengthening domestic demand, improved labor market conditions, and wage growth, as well as improved external demand for Malaysia’s manufactured products and commodity exports,” the report said.
Capital expenditure has increased due to higher private and public investment, the bank said.
The Southeast Asian country’s stronger-than-expected growth rate has led to deeper structural reforms which enhanced productivity and addressed market constraints, the lender added.
These reforms done through policies will enable access to more remunerative employment and real income gains for lower-income families, it added.
The bank had in October raised growth forecasts for Malaysia and Thailand on rosier outlook, but cut forecasts for several countries in the region including Myanmar and the Philippines.