Malaysia's gross domestic product (GDP) is estimated to moderate slightly to 5.0 per cent in 2018, with growth fundamentals appearing solid on the back of improving global fundamentals and higher oil prices.
According to the OCBC Bank 2018 Global Outlook report, the country's economic growth would like stay supported by further traction seen in private consumption, investment spending and trade.
"The fiscal spending backdrop from the recent Budget should add to bolster both consumer and investor confidence this year" it said.
It said the higher inflationary pressures could be a natural by-product when both demand-pull (driven by stronger domestic demand) and supply-push (higher oil and food prices) forces concurrently tune higher into the year.
"As such, further monitoring on how domestic prices may evolve into 2018 is warranted.
"In the same vein, with Bank Negara Malaysia commenting its flexibility Â– to adjust the degree of monetary policy accommodativeness" it added.