Malaysia's economic growth to be subdued

Malaysia's economic growth next year will likely be subdued, falling below the government's target, due to fiscal consolidation, a foreign services company predicted.

Nomura Securities Co Ltd, Japanese financial services giant, in its report on Wednesday said it expected Malaysia's gross domestic product (GDP) growth in 2014 to remain at 4.5 percent, compared with the government's forecast for a 5-5.5 percent growth next year.

"We think the government's assumption of 5 percent to 5.5 percent GDP growth may be ambitious because of fiscal consolidation. We continue to expect a GDP growth of 4.5 percent in 2014," Nomura said in its report.

Nomura lauded the recently announced Budget 2014 as a strong indication of the government's commitment to fiscal consolidation, that is, reducing its fiscal deficit and debt levels, through key reform measures such as continued subsidy rationalization and the implementation of the Goods and Services Tax (GST).