KUALA LUMPUR: RAM Rating Services Bhd has forecast gross domestic product (GDP) growth of 4.5 per cent for Malaysia this year, thus representing a "delicate recovery".
In its November publication, "Economic Outlook 2017", it said the growth momentum is projected to pick up after the sluggishness of the last couple of years, mainly led by stabilising domestic demand.
Private consumption is anticipated to remain resilient at 6.0 per cent, while private investment growth is seen to strengthen to 5.5 per cent, on the back of ongoing infrastructure developments.
"That said, external demand will pose the biggest uncertainty in terms of economic performance," it said.
As for 2016, RAM Ratings has estimated the country's economy to clock in at 4.2 per cent, with resilience underpinned by domestic demand.
"External demand remained sluggish last year, despite a more competitive exchange rate for domestic exporters.
"Private consumption growth, meanwhile, is anticipated to strengthen to 5.8 per cent following the Goods and Services Tax (GST) shock of the previous year," it said.
Meanwhile, RAM Ratings said although data on forward-looking export orders and the tech cycle's momentum had provided some recent upside to exports of electronic and electrical goods, there were also some downside risks.
Citing an example, RAM Ratings said uncertainties vis-à- vis the United State's stance on trade and investment, as well as the BREXIT dynamics would still be pivotal to Malaysia's cautiously optimistic headline growth forecast of 4.5 per cent.
"Unless these factors significantly derail global cyclical demand, we expect exports to record a moderate 1.7 per cent growth this year, following the weak showing in 2016," it added.