KUALA LUMPUR, Dec 3 ― The downward trend in Malaysia’s exports since October is likely to continue into the new year as demand from the country’s biggest trade partner, China, stays weak.

However, the country’s economy will remain buoyant in 2016, offset by improved domestic demand due to low interest rates set by Bank Negara Malaysia (BNM), according to projections from Moody’s Analytics, a unit of the global risk management company.

“A rebound in Chinese demand is unlikely in 2016, which will continue to dampen Malaysia’s export performance.

“Malaysian domestic demand is on the mend thanks to the low interest rate environment and should drive improved GDP growth in the next year,” it said in a press release yesterday.

Malaysia’s central bank kept interest rates relatively low at 3.25 per cent for the past eight consecutive meetings till October.

Moody’s Analytics noted that Malaysia’s foreign trade had dipped from a RM9.7 billion high in September to RM9.5 billion in October and credited the slide to a slowdown in China’s economy.

Malaysia also suffered a drop in exports due to the fall in commodity prices, with global crude oil prices taking a beating and palm oil being hit by a 20 per cent price decrease.

Petroleum is one of the country’s top earners, along with palm oil; Malaysia is the second largest producer of the plant-based commodity in the world after Indonesia.

Large-scale forest fires in Indonesia caused the widespread haze across southeast Asia over the past few months that Moody’s Analytics said may have impeded production and shipping, and which will be reflected in Malaysia’s October trade data.

However, it was optimistic that the effects would disappear in the next few months.

It further noted that the slight gains in exports was due to the lower value of the ringgit.