Slower 2015 GDP growth for Malaysia seen - MARC

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KUALA LUMPUR (Nov 18): Malaysian Rating Corp Bhd (MARC) expects Malaysia to record slower gross domestic product (GDP) growth of 5% in 2015.

The forecast compares to bond rating agency MARC's GDP growth forecast of 5.8% in 2014.

In 2015, Nor Zahidi said the country's slower economic growth is mainly due to lower private consumption growth. This took into account the planned goods and services tax implementation and government subsidy rationalisation.

"If you want to achieve GDP growth of 5.5%, the rule of thumb is to achieve private consumption growth of 7%. I don't think we are going to get that in 2015," he said.

Nor Zahidi said MARC had projected private consumption growth at 5.2% in 2015.

"Prices are likely to go up and private consumption is likely to taper off a little bit. That's the thing, which we think will bring down the GDP growth to 5% (next year)," he said.

Last week, Bank Negara Malaysia said the nation's GDP grew 5.6% in 2014's third quarter  from a year earlier on private sector demand as export growth slowed.

Bank Negara said GDP expansion also came on growth in crucial domestic sectors.