Malaysia cuts GDP forecast in sign of Asia stress
KUALA LUMPUR (AP) - Malaysia slashed its growth forecast on Wednesday, highlighting challenges facing Asian economies as China slows and investors anticipate a scaling back of extraordinary monetary stimulus in the US Bank Negara Malaysia, the country's central bank, said it expects the Malaysian economy to grow between 4.5 per cent and 5 per cent in 2013.
The central bank had earlier forecast growth of 6 per cent.
The downgrade is the latest sign of stress in Asia's emerging economies. Thailand earlier this week reported that its economy contracted for a second straight quarter. India and Indonesia are facing sharp declines in their currencies that partly stem from worries current account deficits in those countries are unsustainable.
The US Federal Reserve's campaign to keep interest rates super low to spur economic recovery initially sent money flooding into Asian markets in search of higher returns. That tide is now ebbing and roiling the region's weaker economies.