17/10/2011 (Borneo Post) - A leading think tank has downgraded its economic growth forecast for Malaysia for this year and 2012, citing concern that Europe’s financial crisis could hit the country’s trade-focused economy.

The Malaysian Institute of Economic Research (MIER) revised its estimate for 2011 growth to 4.6 per cent, down from an earlier 5.2 per cent projection, it said in an announcement on its website Thursday.

The revised estimate is lower than the government’s official forecast of between five and 5.5 per cent growth in 2011, which it reiterated last week in a budget submitted to parliament.

Meanwhile, MIER adjusted its earlier prediction for 2012 to 5.0 percent, down from 5.5 per cent.

“The global economic outlook remains fluid and increasingly worrying,” MIER’s revised forecast said.

“Further deterioration in the economic and financial environment in the eurozone will likely weaken the US further, with repercussions for international trade.”

Malaysia’s economy grew four per cent in the second quarter, its slowest pace in nearly two years, on softening global export demand. Official third-quarter figures have not yet been released.

The economy grew 7.2 per cent in 2010.

Malaysia depends heavily on exports of key commodities such as palm oil, liquefied natural gas, and chemicals, as well as manufactured goods like electronics. — Bernama