Malaysia central bank sees slower growth in 2015, sliding oil prices a risk

KUALA LUMPUR[KLSE] Malaysia's economy is expected to expand 4.5 to 5.5 per cent this year as strong domestic demand and resilient exports will anchor growth, although the risks of declining oil prices affecting its outlook linger, the central bank said on Wednesday.

Southeast Asia's second-largest oil and natural gas producer has seen slumping global energy prices hit revenue, putting pressure on the country's fiscal position and knocking the ringgit to a six-year low.

Problems stemming from a heavily-indebted investment fund, 1Malaysia Development Bhd and the prospect of the first rise in US interest rates in almost a decade, have also added to the risk of a sovereign downgrade and capital outflows.

Bank Negara, in its annual outlook, said growth would be supported by sustained expansion in services, manufacturing and construction sectors, broadening of the government's revenue base and from managing expenditure.