Tuesday, April 15, 2003

MIER cuts Malaysia's 2003 growth
forecast to 3.7%

The Malaysian Institute of Economic Research (MIER) has slashed its forecast for Malaysia's 2003 economic growth to 3.7 percent from 5.7 percent, citing the war in Iraq and the SARS outbreak.
"As a very open economy and a trading nation, Malaysia's economic outlook will depend significantly on the global economic prospects," the private think-tank said.
MIER said first-quarter growth in gross domestic product was a little over 5.0 percent but added it would slow during subsequent quarters in 2003.
"GDP growth for the first quarter should exceed five percent but in the second quarter, third quarter, we expect a deceleration," its executive director Mohamed Ariff told reporters.
MIER also cut its 2004 GDP forecast to 5.4 percent from an earlier prediction of 6.3 percent.
MIER said the government was likely to announce a stimulus package soon to boost domestic demand, given that manufacturing growth looked set to remain flat and the hoped-for boom in tourism was likely to take a hit from SARS.
The Institute's Business Confidence Index rose 13.2 points to 99.3 in the January-March period but remained below the 100 points, reflecting "recessionary tendencies".
The think tank's Consumer Sentiment Index fell 7.6 points to 105.2.
Last month, Malaysia's central bank forecast GDP growth of 4.5 percent in 2003, slightly above last year's 4.2 percent growth.