KUALA LUMPUR, Feb. 9 (Xinhua) -- Malaysia's economic growth this year is expected to remain decent at 5 percent, said a foreign bank's economist Friday.
"With exports, manufacturing, and higher oil prices to support economic activities, Malaysia's GDP (gross domestic product) growth is projected at a healthy 5 percent in 2018," said Selena Ling, chief economist of Oversea-Chinese Banking Corporation Limited (OCBC).
Given the strong performance in the first three quarters of 2017, Ling also expects Malaysia's full-year growth to come closer to the upper range of the official projection of between 5.2 to 5.7 percent in 2017.
Malaysia will announce its Q4 2017 GDP on Wednesday. The country's economy rose 6.2 percent year-on-year in Q3, the fastest space in more than three years.
Ling, however, warned that the pick-up in economic activities may come with higher inflationary pressures.
"With inflation pressures pacing relatively faster vis-a-vis its Asian peers, Malaysia would need to stay vigilant on any early signs for a faster-than-expected surge in inflation into 2018 given the sizable household debt levels," she said.
Further monitoring on how domestic prices may evolve into 2018 is warranted, she added.
Meanwhile, Malaysia's headline inflation is likely to come in at the upper-end of the official forecast range of 3 percent to 4 percent for 2017, according to Ling.
"Domestic prices continued to rise into Q4 2017, underpinned by increases in transport cost as well as higher prices for food and non-alcoholic beverages," she added.
Although there are clear signs of growth, Ling believed the Malaysian economy is still susceptible to external shocks such as a global growth slowdown or geopolitical tensions.
The general election, which must be called before August, may also a potential risk for the country's economy, she said.