Economists predict Malaysian growth to slow

Economists predict Malaysian growth to slow

KUALA LUMPUR (AFP): Malaysia's growth will slow down this year
as the U.S. economy falters and corporate restructuring stalls,
according to a poll of 11 regional economists published on
Sunday.

Ten of the 11, who were questioned by The Edge business
weekly, gave forecasts for gross domestic product growth for 2001
and these varied between 4.0 and 7.0 percent.

Three opted for 6.0-7.0 percent and the rest a lower figure.
The official forecast for this year is 7.0 percent.

The government estimate for last year is 7.5 percent but
Finance Minister Daim Zainuddin has said this is likely to be
exceeded.

Seven of the 11 mentioned the U.S. slowdown as a potential
danger for the local economy while four cited inadequate or
stalled domestic corporate reform.

Three mentioned the danger of a global slowdown and two cited
domestic political risks.

The Edge said all the economists believe the recovery from the
1998 recession is sustainable but 82 percent say it has not
extended to all sectors, with construction the biggest laggard.

A slower U.S. or global economy would hit demand for
electrical and electronic goods which make up 61 percent of all
Malaysia's exports.

Almost 21 percent of all the country's exports go to the
United States.

Corporate restructuring was the main domestic concern.
"Inadequate restructuring of debt-laden companies could undermine
investor confidence and hold back long-term recovery," one
foreign economist was quoted as saying.

Finance Ministry adviser Mustapa Mohamed urged Malaysians on
Saturday not to be unduly pessimistic about overseas
developments, saying the U.S. economy was not expected to go into
recession.

"We should not be pessimistic of external developments. We
should pray for the country's continued progress and
development," Bernama news agency quoted him as saying.