KUALA LUMPUR (June 30): The World Bank expects Malaysia to post gross domestic product (GDP) growth at 4.5% and 4.7% in 2017 and 2018 respectively from a year earlier as commodity prices recover as global economic growth improves.

In its Malaysia Economic Monitor report, the World Bank said its 2017 and 2018 GDP growth forecast for the nation followed the bank's 4.4% GDP growth estimate for the country in 2016. In 2015, the nation's economy expanded 5%.

The World Bank said its slower 2016 economic expansion forecast stemmed from a gradual deceleration in private consumption growth due to a softer labour market and household adjustments to fiscal reforms.

"Private investment growth is also expected to moderate, as commodity prices and global economy growth remain subdued. Subsequently, Malaysia's GDP is expected to grow at 4.5% and 4.7% in 2017 and 2018, respectively as commodity prices recover and global economic growth improves," the bank said.

The World Bank said Malaysia's participation in regional trade agreements, which included the Trans-Pacific Partnership Agreement and European Union Free Trade Agreement, would support Malaysia's future development.

According to the bank, these agreements can help the nation implement key reforms, attract investments and offer market access for Malaysian exports.

The World Bank country director for Malaysia Ulrich Zachau said during the launch of the report here today the country has the potential to achieve high-income status.

"With new trade agreements, Malaysia can accelerate reforms to support its transition to high-income status.

"Malaysia has the potential to make great strides towards high-income status, by boosting the productivity of small and medium enterprises, bolstering competition across sectors, liberalising services to further support exports, and attracting higher value-added foreign investment," Zachau said