The Malaysian economy will face downside risks from the tightening of monetary conditions in advanced economies.

The Malaysian Institute of Economic Research (MIER) said weaker global growth also stem from insufficient fiscal consolidation.

Malaysia also faces the spectre of twin deficit and must not delay in structural reforms.

It expects the fourth quarter of 2013 to be better than the first three quarters.

Growth is expected to be 4.8 per cent in 2013 and between 5.0-5.5 in 2014.

"Real GDP growth is projected to move nicely along the potential output growth trajectory of between 5.5 to 6.0 per cent in 2015, driven by efficiency and innovation."