KUALA LUMPUR, Oct 20 — Malaysia’s ringgit dropped to its lowest in almost two weeks on concern falling raw-materials prices will hurt government income and widen the budget deficit.

The Bloomberg Commodity Index declined 1.4 per cent yesterday, the biggest loss in a month, after China reported industrial output and fixed-asset investment data for September that missed economist estimates.

Malaysia’s government gets 22 per cent of its revenue from oil-related exports and Prime Minister Najib Razak is scheduled to deliver his 2016 annual budget plan on Friday.

“The weakening trend of the old part of the Chinese economy, underlined by the downside surprise in the industrial production and fixed-asset investment, weighed on commodity prices such as crude oil and base metals,” said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore Ltd.

“This is negative for commodity currencies such as the ringgit.”

The ringgit retreated 1.2 per cent to 4.2570 a dollar as of 9:41am in Kuala Lumpur today, after losing 2.1 per cent in the last two trading days, according to prices from local banks compiled by Bloomberg.

The currency sank as low as 4.2853, its weakest since October 7.

While China’s gross domestic product increased 6.9 per cent, beating the median estimate in a Bloomberg survey for a 6.8 per cent gain, its industrial-output growth of 5.7 per cent fell short of the 6 per cent predicted.

The country is the world’s second-largest economy and No. 1 consumer of energy, metals and grains.

The 2016 budget will be “one of the most difficult,” Najib was quoted as saying in a New Straits Times report yesterday.

The premier is seeking to trim the fiscal shortfall to 3.2 per cent of gross domestic product this year from 3.5 per cent in 2014.

Malaysia is Asia’s only major net exporter of crude oil and is also the world’s second-biggest producer of palm oil, which despite recovering some ground from a 2015 low in August is still down 8 per cent from this year’s peak in September.

Malaysia’s government bonds maturing in September 2025 fell, pushing the yield up by one basis point to 4.13 per cent today, prices from Bursa Malaysia show. — Bloomberg