The international rating agency has also reduced Malaysia’s real GDP growth for next year to 4.3% from 4.5%.
“Growth in Malaysia will slow this year and next year because of its highly open economy and uncertainty in the global trade front,” said Anushka Shah, a vice president of Moody’s at press briefing in Kuala Lumpur.
On March 27, Bank Negara Malaysia cut its economic growth forecast for this year and projected a major drop in export expansion due to slowing global growth and the U.S.-China trade war.
The GDP for 2019 should grow 4.3%-4.8%, not 4.9% as projected by the Government in November, the central bank said in its annual report.
Malaysia reported 4.7% growth for last year.
Shah said as Malaysia’s linkages with China are high and rising, China’s economic slowdown projected for this year would have an impact on Malaysia.
Moody’s has projected China’s economy to grow at 6.0% this year.
She added weaker trends in global trade will also act as a drag.