Growth in the Malaysian economy will quicken this year to 4.5 per cent and improve further to 4.7 per cent next year, said the International Monetary Fund (IMF) today. In the latest Regional Economic Outlook for Asia and Pacific which was released in Singapore today, the IMF projected Malaysia’s current account balance to decline to 1.8 per cent of GDP for 2017 and 2018.

The current account balance last year slipped to 2 per cent of GDP in 2016, mainly on weaker oil and gas trade balances.

It expects the Consumer Price Index to post a 2.7 per cent growth this year and 2.9 per cent growth next year.

For 2016, it noted that growth in the Asean economies increased although the economic cycles within the region continue to diverge.

In Indonesia, growth accelerated to 5 per cent, supported by robust private consumption.

The Malaysian economy saw a moderate expansion, with growth at 4.2 per cent — the slowest rate since the global financial crisis — driven mainly by private domestic demand, while net exports contributed negatively.

Meanwhile, IMF said excessive credit growth is decelerating in many major economies in the region.

“Although the credit-to-GDP gap or credit gap — a measure of excess credit — is declining in such economies as Hong Kong, Indonesia, Malaysia, Singapore, and Thailand, it remains substantial in several economies, while still increasing in others (China).