THE Malaysian economy is expected to grow by 4.5% this year, up from 4.2% last year, said an economic think-tank, due to improving external demand and growth in the overall global economy.

The Malaysian Institute of Economic Research (MIER) said the national economy is expected to grow between 4.7% and 5.3% next year (2018).

In its 22nd corporate economic briefing, MIER said the better outlook this year is also driven by better commodity prices, such as oil and a higher volume in world trade.

“Domestic demand will continue to be the engine of growth in 2017,” the report said, adding that inflation is also expected to increase because of higher consumer spending and a surge in cost factors.

MIER said business conditions in the first quarter of 2017 have improved compared with the same period last year because of higher sales and production volume.

“Local and export orders are picking up,” MIER said, adding that it expected production and export sales to trend higher for the rest of the year.

Consumer sentiment has also improved slightly in the same period but remains weak because of worries over rising prices of goods. – April 18, 2017.