The country's economic growth is expected to rise to 5.7 percent next year, led by a rebound in exports, a stronger private sector and favourable government policies, a think-tank said today.

The government is expecting growth of between four to five percent this year.

"If global economic and geopolitical conditions improve in 2003, we could possibly expect a better outcome in 2004," Malaysian Institute of Economic Research (MIER) executive director Mohamed Ariff said at an economic outlook seminar.

Ariff said MIER was forecasting 6.3 percent growth for 2004 as a result of a steady rise in global and domestic demand.

External demand is projected to pick up next year in line with the International Monetary Fund's global growth forecast of 3.7 percent but risks included a war in Iraq or any further devastating terrorist attacks, he said.

Ariff said foreign direct investment in Malaysia would regain momentum with the expected global economic recovery.