-  BNM expects real GDP growth of 4.5%-5.5% in 2014 owing to better performance of external sector amid the softer domestic demand.

-  Domestic demand is anticipated to grow at a softer pace of 6.9% during the year, driven mostly by the strong growth in private investment (2013: +7.6%).

-  As for inflation, the Bank foresees higher prices on the back of ongoing fiscal reforms. Inflation will probably elevate to 3.0%-4.0% this year vs. 2.1% in 2013.

-  Meanwhile, full-year current account will register a surplus of RM30.8bil in 2014 (2013: RM37.3bil).

-  Despite the stronger exports, trade surplus is expected to moderate in 2014. In the balance of payment account, the balance of goods and services will likely moderate to RM93.7bil (2013: RM102.7bil).

-  The Monetary Policy Committee will continue to ensure that macroeconomic conditions and policies remain accommodative to facilitate growth in the midst of continued uncertainties in the global environment.

-  Separately, BNM announced yesterday that effective 2 Jan 2015, the Base Rate will replace the Base Lending Rate (BLR) as the main reference rate for new retail floating rate loans. The new rate will be determined by the financial institutions’ benchmark cost of funds and the SRR. 

Source: AmeSecurities