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S&P warns prolonged oil slump may derail Malaysia's fiscal plan

[KUALA LUMPUR] Credit rating agency Standard & Poor's said on Tuesday that a prolonged slump in oil prices could derail Malaysia's fiscal consolidation plan and put at risk the government's revised economic growth forecast of 4.5 to 5.5 per cent.

"The risks are that the contracting oil and gas sector could affect activities in other sectors to bring down overall economic growth," YeeFarn Phua, associate director of Sovereign Ratings at S&P said about Malaysia's revised budget announcement.

The ringgit currency fell to a six-year low on Tuesday as the government cut its economic growth forecast, reduced its budget and widened its fiscal deficit target for 2015, to reflect lower oil and gas revenues due to plunging world prices.