Malaysia's industrial output fell in February, indicating that the government's revised economic growth forecast of 4.5 percent this year may be too bullish, analysts are saying.

The Statistics Department said February's industrial output dipped 0.9 percent from a year earlier, dragged down by an 8.9 percent fall in the electricity sector and a o­ne percent decline in manufacturing, while mining output rose 4.2 percent.

Production in February was also down 1.9 percent from January as electricity and mining output plunged 18.7 and 10.6 percent respectively, but manufacturing showed a two percent gain, it said in a statement yesterday.

In the first two months of the year, industrial production expanded 1.2 percent from a year earlier.

Twin blow

The outlook is grim because Malaysia's industries are reeling from the twin blow of the war in Iraq and the outbreak in recent weeks of the deadly Severe Acute Respiratory Syndrome (Sars) which has killed more than 100 people worldwide.

The central bank last month cut its economic growth forecast this year to 4.5 percent from 6.0-6.5 percent but analysts said February's industrial data signaled a sharp slowdown and suggested that the revised forecast was too optimistic.

"It seems that the pace of growth is slowing sharply and that... revised 2003 4.5 percent growth forecast may be a tad o­n the high side," GK Goh Research said in a report.

It said growth could be lower as tourism would also be badly hurt by the Sars epidemic, especially in the second quarter if Singaporeans -- who account for 60 percent of total tourist arrivals -- were staying home instead of travelling around Malaysia and the region.

The tourism ministry Tuesday said the Sars epidemic had led to hotel occupancy plunging to as low as 30 percent and airline bookings falling by 40 percent.

Deferred plans

Manufacturers last week warned weak global growth prospects meant the sector was likely to grow o­nly two percent this year, compared with the government forecast of five percent.

Malaysia has deferred plans to announce a stimulus package to prop up the economy because of the war lasting longer than initially expected and the spread of Sars.

Acting Prime Minister Abdullah Ahmad Badawi was quoted as saying Tuesday that the government would unveil the package after uncertainties have lessened and the war's impact o­n the economy could be properly assessed.

"We will fix the date. This month is too early to announce any package or measures," he said.

"If we make the proposals early (and) implement them early, we may have to change them as the war will probably require us to make changes."

The package was originally due to be unveiled late March but it was postponed to early April after war broke out and would now o­nly be announced in the next two months, a government official told AFP.

Analysts said the delay was prudent but warned the government should avoid any major spending spree as the country has already run up a series of high budget deficits. AFP