Malaysia cuts growth forecast as oil price slump hits

Malaysia cut its 2016 growth forecast and announced revisions to the national budget as it reels from the global oil price decline.

Prime Minister Najib Razak says the government had based the 2016 budget on oil prices averaging $48 a barrel, but that estimate has been lowered to $30-$35 a barrel. He says the government loses around 300 million ringgit ($70 million) for every $1 drop in oil prices.

Najib says economic growth will be between 4 and 4.5 percent this year, down from an earlier estimate of 4 to 5 percent.

He said worker contributions to a national provident fund will be slashed by three percent from March until December 2017, a move that is expected to boost household spending by eight billion ringgit ($1.9 billion).