KUALA LUMPUR, Sept 15 — Malaysia’s economy is unlikely to expand beyond 4.1 per cent this year and 4.7 per cent in 2017 as China’s cooling market will hurt local exports, according to BMI Research.

The Fitch Group research house said it expects the country’s volatile export figures to persist and hamper overall growth, noting that exports account for 71 per cent of Malaysia’s gross domestic product (GDP).

"Export figures from Malaysia indicate that the country is unlikely to exhibit strong economic growth in H216 as China’s slowdown continues to undermine growth in the export sector,” it said in its report today.

"However, we maintain our 2016 and 2017 real GDP forecasts of 4.1 per cent and 4.7 per cent, respectively, as we expect the gradual pick up in the global tech sector to lend some support.”

The report noted that electrical exports, which comprise 24 per cent of Malaysia’s exports, have remained resilient.

It said this could provide a foundation for recovery as the global tech cycle appeared to be on the upswing, citing indications of improvement in Japan and Taiwan that are considered bellwethers for the sector.

BMI Research also suggested that Bank Negara Malaysia might reduce interest rates to counter the slowing economy.