KUALA LUMPUR, Aug 18 Reuters Malaysia39;s economic growth hit the lowest in nearly two years in the second quarter due to sliding exports and a global slowdown, prompting the central bank on Friday to warn that fullyear growth will come in at the lower end of its previous forecast.

The weaker outlook does not change most economists39; expectations for the central bank to keep policy rates on hold this year as the Southeast Asian economy confronts weakening global demand and a slowdown in main trading partner China.

Secondquarter annual growth came in at 2.9, central bank data showed. The 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.

Bank Negara Malaysia also said fullyear economic expansion will come in at the lower end of the 4 to 5 range it had forecast earlier, though some economists predict the target will be hard to reach as domestic demand slows as well.

The weak external demand is expected to weigh on nearterm growth. The economy is facing downside risks stemming from weakerthanexpected global growth, and a deeper or longerthanexpected technology downcycle, Governor Abdul Rasheed Ghaffour told a news conference.

While he does not expect a worldwide recession, the governor said global growth will be below the longterm average….