Malaysia's growth forecast cut on Wednesday, highlights the challenge for the Asian economies, China's slowdown and investors expect to cut special monetary stimulus in the us
Malaysia's national bank, the country's central bank, said Malaysia is expected economic growth between 4.5% and 5% in 2013. The central bank had predicted growth of 6%.
The downgrade is the latest sign of the pressure of Asia's emerging economies. Thailand earlier this week reported that its economy contracted for a second consecutive quarter. India and Indonesia are faced with the sharp drop in its own currency and partly in these countries the concerns of the current account deficit is unsustainable.
The activities of the federal reserve, remain ultra-low interest rates to stimulate economic recovery, initially sent money into Asian market looking for higher returns. Ebb tide now stirring region economy is weak.
Malaysia's central bank said that domestic demand is expected to remain strong, but weak global economy will be offset. It has come under the pressure of the Malaysian ringgit, since April fell nearly 7%.
Malaysia's economy rose 4.3% from a year earlier in April to June quarter, less than economists had forecast growth of 4.7%, according to figures released on Wednesday.
China's slowing economic growth, the world's second largest economy, and expectations the fed will quickly reduce their monthly purchase of financial assets, leading to the Asian financial market capital flight, the central bank said. High debt burden with many European countries, these factors will drag on the emotional and economic growth prospects, it said.
On Wednesday, the central bank to keep its benchmark interest rate unchanged at 2.5%, although the economy is weak, the mixing area of speculation that the fed's monetary policy limited room for manoeuvre.



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