KUALA LUMPUR: Malaysia’s economic growth dropped to 2.9% in the second quarter, hitting the lowest in nearly two years due to weaker exports and a global slowdown, the central bank said on Friday.

Bank Negara Malaysia also said the country’s full-year economic expansion will come in at the lower end of the 4% to 5% range it had forecast earlier, citing global headwinds.

“Risks to Malaysia’s growth outlook is subject to downside risk stemming primarily from weaker-than-expected global growth,” governor Abdul Rasheed Ghaffour said in a statement.

Improving tourist arrivals and faster implementation of domestic projects could provide some upside, he said.

The second-quarter expansion was the slowest pace since the third quarter of 2021 when the economy contracted by 4.2%, and was lower than the 5.6% growth in the first quarter of the year.

Economists surveyed by Reuters had forecast gross domestic product growth at 3.3% in the April to June period.