KUALA LUMPUR, Sept 12: The short war in Iraq and quick containment of the Sars outbreak have put Malaysia’s economy on track for sharper growth and a smaller budget deficit next year, the finance ministry said in its annual report on Friday.

The report, issued along with the national budget presented by Prime Minister Mahathir Mohamad, forecast real gross domestic product growth in 2004 at 5.5-6.0 per cent, compared with 4.5 per cent this year and 4.1 per cent in 2002.

At the same time, the overall deficit in the 2004 federal budget will be forced down to 3.3pc of GDP, from the 5.4pc expected this year, by a cut of 21.3pc in development expenditure.—AFP