Falling commodity prices present downside risk to Malaysia’s economy

Major commodities that concern Malaysia, such as crude oil and crude palm oil, are hovering at their four-year lows.

THE downside risk to economic growth seems to have increased for Malaysia in the face of falling global commodity prices.

Several economists have in recent weeks flagged their concerns over the potential negative impact the current trend, if prolonged, could have on the country, which relies on oil for revenue and a wide range of other commodities such as crude palm oil for export earnings. They note that Malaysia, as a major commodity exporter, could likely see lower export earnings under the present environment and this could add pressure on the country’s current account.