The Malaysian Institute of Economic Research (MIER) today cut its economic growth forecast for this year from 4.5 percent to 4.0 percent, but maintained its 2003 estimate at 5.7 percent.

The private think-tank's expectations are now at the bottom end of the government's own forecast of 4.0-5.0 percent growth this year. For 2003, the government's prediction is expansion of 6.0-6.5 percent.

MIER attributed its more pessimistic outlook for this year to external factors including the global economic slowdown, the recent problems at US west coast ports, weak financial markets and the increasing risk of war in Iraq.

"Although downside risks... could very well extend beyond 2002 into 2003, we are fairly optimistic that the world economy and trade activities will improve in 2003, barring any unforeseen and highly disruptive events.

"On the back of a better external environment, a healthier private sector and continuing expansionary fiscal policy, GDP (gross domestic product) growth could reach 5.7 percent in 2003," the report said.