MALAYSIA’S gross domestic product this year is projected to grow at 5.8% year-on-year, the highest annual growth rate since 2014, said World Bank Group Malaysia and Thailand director for regional partnerships Dr Ulrich Zachau.

He said the World Bank expected the economy to remain strong next year, and projected a growth of 5.2%.

“Accelerated growth has been fuelled by strengthening domestic demand, improved labour market conditions and wage growth, as well as improved external demand for Malaysia’s manufactured products and commodity exports.

“Capital expenditure has also increased due to higher private and public investment,” said Zachau at a press conference to release the 17th edition of the Malaysia Economic Monitor in Kuala Lumpur today.

He said as Malaysia was expected to achieve high-income-nation status over the next few years, it was important to increase the per capita income of all groups, particularly that of the bottom 40% of households, or B40.

He said this would benefit the population equally, adding that there would be social cohesion across all groups in the country.

“However, equality remains a challenge as income rises, and the government needs to ensure that Malaysia’s growth is sustainable.”

World Bank Group lead country economist Dr Richard Record said the medium-term moderate projection of a 5.2% GDP growth for next year was fair.

“We are confident that if economic policies stay on course with continued, prudent and sound macroeconomic management, coupled with continued strong reforms, Malaysia will continue to enjoy robust growth.”

He said while Malaysia had the strength to remain strong next year, it should take the opportunity to focus on increasing productivity at a rapid rate through education and the adoption of digital technology.

In October, the World Bank projected upwards Malaysia’s GDP growth at 5.2%, after an earlier forecast of 4.9% in June. – Bernama, December 14, 2017.