The Malaysian Institute of Economic Research (MIER) has revised upwards Malaysia's gross domestic product (GDP) to 5.4 percent for this year, driven by stronger domestic and external demands.

Executive director Dr Zakariah Abdul Rashid said the revision was a 0.6 percentage point higher from its July forecast of 4.8 percent.

"The economy performed strongly in the first half of the year, with the 5.7 percent GDP growth driven by domestic demand.

“However, we think that household and private investments in the second half of 2017 will not be growing as fast as the first half," he told a press conference on the Malaysian Economic Outlook for the third quarter here, today.

He said domestic demand was expected to grow by 4.8 percent this year, an upward revision of 0.2 percentage point, while private consumption was expected to grow by 6.1 percent, an upward revision of 0.1 percentage point.

Zakariah said the economy would continue to be driven by domestic demand despite the significant increase in trade activities, given the relatively low net exports at 1.4 percent, indicating a small surplus gap between exports and imports.

"Even though exports and imports have been dominating our economic outlook for 2017, the external sectors will not be able to drive the economy significantly.

"Our imports and exports are growing at the same rate. This is a structural problem because we have to import materials and machinery in order to export," Zakariah said.

For 2017, exports and imports growth were also revised upwards to 13.4 percent and 13.6 percent respectively, due to better-than-expected global demand, as advanced economies grew beyond expectations.

Meanwhile, MIER maintained its 2018 GDP growth projection at a range of between 4.7 percent and 5.3 percent while awaiting fresh leads.

- Bernama