A corner of Kuala Lumpur (Photo: theedgemarkets.com)

Kuala Lumpur (VNA) - Fitch Solutions Macro Research, a rating agency of Fitch Group, has cut its growth forecast for Malaysia for 2018 to 4.6 percent compared with its previous forecast of 5.1 percent, following a weaker-than-expected performance in the third quarter of the year, according to The Star.

“The 2018 revision reflects the weaker-than-expected third quarter 2018 results and our expectations for growth to slow further in the fourth quarter,” it said in a statement.

The country’s GDP growth reached 4.4 percent in the third quarter, slightly down from 4.5 percent in the preceding quarter.

The growth moderation represented the fourth consecutive quarter of GDP slowdown – and the slowest pace in two years – for Malaysia.

In addition, Fitch Solutions also revised its 2019 GDP growth forecast for Malaysia down to 4.2 percent from 4.5 percent previously.

 “Malaysia’s growth in 2019 would likely be negatively impacted by broad-based headwinds from nearly all the expenditure components of the GDP, except private consumption, which we expect to be supported by a large, one-time repayment of tax refunds in 2019,” it added.

Fitch Solutions said the revision to the 2019 figure reflected its concerns about exports and investment growth for next year.

It expected Malaysia’s 2019 external outlook to be negatively affected by the combination of a slowing semiconductor cycle and a likely escalation of the US-China trade dispute amid still-low palm oil prices, which should weigh on the country’s trade balance.

“Moreover, investment, particularly foreign investment, is likely to remain subdued due to continued policy uncertainty,” it said.-VNA