Malaysia cuts 2016 growth forecast to 4-4.5% on oil woes

Malaysia Bhd. headquarters in Kuala Lumpur, Malaysia.
Malaysia Bhd. headquarters in Kuala Lumpur, Malaysia. PHOTO: BLOOMBERG

KUALA LUMPUR (REUTERS) - Malaysia on Thursday (Jan 28) trimmed its 2016 growth forecast as a slump in oil prices forced Prime Minister Najib Razak to revise the fiscal budget.

Mr Najib said the Malaysian economy is expected to grow between 4 per cent and 4.5 per cent this year, down from an earlier forecast of between 4 per cent and 5 per cent.

"After taking into consideration the current economic scenario, the government has decided to revise the 2016 forecast," he said.

The revised estimate is based on assumptions that oil would range US$30 to US$35 a barrel this year. The initial budget in October had assumed an oil price of US$48.

Mr Najib said the national debt level will continue to be reduced and will not exceed the level of 55 per cent to GDP.