KUALA LUMPUR (REUTERS) - Malaysian Prime Minister Najib Razak is expected to announce measures to strengthen the economy on Monday (Sept 14) as falling commodity prices weigh on growth and the ringgit plumbs to near 18-year lows.

Slowing demand from China and a political crisis swirling around Datuk Seri Najib have also shaken investors in South-east Asia's third-largest economy in recent months, pushing the ringgit down nearly 19 per cent against the US dollar so far this year.

Mr Najib is expected to announce the new measures at around 11.30am after a weekly meeting of the economic council on Monday, officials at the Prime Minister's office said on Saturday (Sept 12), without giving details.

In August, he set up a special economic committee to propose immediate and medium-term measures to strengthen the economy and to restore investor confidence.

Malaysia has been gripped by political tensions which escalated in early July after a report that investigators looking into debt-laden state investment fund, 1Malaysia Development Bhd (1MDB), had found that close to US$700 million (S$900 million) had been deposited in an account held by the Prime Minister.

Mr Najib, who also chairs 1MDB, has denied any wrongdoing, but the scandal has not died and has weighed on the economy.

Both the premier and Malaysia's central bank governor have pledged not to impose capital controls.

Mr Najib has maintained that Malaysia's current economic situation is stronger than during the 1997-98 Asian financial crisis.

Massive outflows of capital during that crisis forced Malaysia to peg the ringgit at 3.8 to the US dollar, which was retained until 2005.

Fitch Ratings said last week that Malaysia's deteriorating currency position - reflected in the ringgit's sharp depreciation, falling foreign exchange reserves and shrinking current account surplus - could force it to restore a negative outlook on the country's credit rating.