KL cuts growth forecast

KL cuts growth forecast

KUALA LUMPUR (Reuters): Malaysia on Tuesday slashed its economic growth forecast to 5.8 percent in 2001 from an earlier 7.0 percent in anticipation of a softlanding in the United States economy.

Prime Minister Mahathir Mohamad told the Bernama news agency in an interview that Malaysian exports will be affected by a slowdown in the U.S. economy, which was its major trading partner.

Mahathir's statements rattled the domestic stock market with the key share index [.KLSE] hitting a 14-month low on the last day of trading in the year. The index closed down 2.41 percent or 16.75 points at 679.64.

The government had earlier forecast GDP to expand by 7.0 percent in 2001, down from 7.5 percent expected this year.