'Malaysia may not hit 5-6pc growth forecast'

Malaysia's growth will probably miss the government's forecast this year
amid the faltering global economy, according to the Malaysian Institute
of Economic Research.

Southeast Asia's third-largest economy
will expand 3.7 per cent in 2012, the partly-government funded institute
said in a statement in Kuala Lumpur today, cutting its earlier estimate
of 5 per cent gross domestic product expansion. This is below the 5 per
cent to 6 per cent government forecast in its Oct 7 budget statement.

"Economic
growth will likely get bumpier in the months ahead," the institute said
in the report. "Growth in the last quarter of 2011 is expected to be
much lower on account of external developments. Latest monthly economic
indicators are already suggesting that."

The World Bank said
yesterday developing growth in Asia- Pacific economies will slow for a
second straight year on Europe's debt crisis and weaker global trade.
Malaysia likely expanded 4.9 per cent in 2011, the institute said,
missing the government's growth forecast of as much as 5.5 per cent.

"This
year is going to be a bit more difficult than last year, although there
are some positive news coming from the US," Datuk seri Mustapa Mohamed,
International Trade and Industry Minister, told reporters in Kuala
Lumpur late yesterday. "This year, our priority is to manage this more
difficult international environment."

Consumer prices slowed to a
nine-month low of 3 per cent in December, giving Malaysia's central
bank scope to leave interest rates unchanged for a fourth meeting this
month to support growth as the world economy falters.

"A weaker
US recovery, particularly amid the unfolding developments in the long,
drawn-out euro zone debt crisis, would more than likely cause more
near-term growth pains in Malaysia," the institute said. "A surge
inflation seems unlikely at the moment."

Nations from Thailand to Indonesia took advantage of easing inflation to lower borrowing costs late last year. -- Bloomberg