Although many anticipate that the plunge in crude oil prices may cause a global economic downturn, economists and experts believe that Malaysia will not be significantly affected.

"We are not moving towards an economic downturn despite sentiment for global economic growth being clouded by concerns over the US interest rate hike and slowdown in China's economy", said Institute for Democracy and Economic Affairs Chief Executive Wan Saiful Wan Jan.

He said the country has been depressed by external factors, including low oil prices, for two to three years now and thus, was not expecting things to get worse.

"In the Malaysian context, our country is still considered attractive to investors eventhough the degree of appeal might be smaller. The country is still registering growth despite the fact that it is not growing as fast as we want, but not declining very badly either.

"We are recovering from an economic downturn," he told Bernama.

Meanwhile, in sharing his view on the global outlook, Affin Hwang Investment Bank Vice-President and Retail Research Head Datuk Dr Nazri Khan Adam Khan said a global economic turmoil was unlikely to occur as falling oil prices were due to an oversupply situation and not because of under-demand.

Although the price war has sparked a sell-off in international equities, it would only have a significant impact on the economies of big oil producers such as Saudi Arabia, Iraq and Russia.

Investors are called to contravene the plunge in oil prices and accumulate stocks for medium-term gains, given Malaysia's status as no longer being a major oil producer.

"We need to understand that Malaysia is not a significant oil exporter like 10 years ago. In fact, the government has already reduced its dependency on oil revenue from 40 per cent to 20 per cent.

"So, I think if oil prices go down, it should not impact our economy adversely but of course the sentiment will be slightly affected in the short-term," he said.

Nazri believed that the country's fundamentals were still intact and was optimistic that the Bursa Malaysia Composite Index would recover close to the 1,800-points.

"We have the Goods and Services Tax to offset falling oil prices and our private consumption is still strong," he added.

Meanwhile, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) opened this morning at 1,616.12, down 2.71 points, from Wednesday's close of 1,618.83 points. It ended 4.89 points easier at 1,628.55 on Friday.

As for the global market, Wall Street plummeted on Friday Jan 15 with the Dow Jones Industrial Index down 13.7 per cent and the S&P 500 sank 13 per cent to its lowest since October 2014. The FBM KLCI ended 4.89 points easier at 1,628.55 on the same day.

Middle-East bourses followed suit early this week, crashing by more than five per cent, as the lifting of sanctions on Iran prompted fears of a huge oil price war.

The price of oil hit new depths of below US$30 a barrel for the first time in 12 years on worries that Iran might flood the world oil market with millions of barrels of crude oil.

For Malaysian Rating Corporation Bhd Chief Economist Nor Zahidi Alias, the downward pressure on crude oil prices was anticipated in view of the upcoming production from Iran which would already add to the global glut.

But bad news from China further magnified the uncertainties in the global economy, he said.

"As for Malaysia, stability in crude oil prices is critical to its fiscal performance in 2016. It is fortunate that GST revenue, which will likely be more than expected, can help buffer the drop in overall government revenue in 2016.

"Based on our estimates, an average crude oil price of mid-thirties may lead to an increase in budget deficit by approximately 60 basis points if not accompanied by any reduction in government expenditures," he said.

He, however, said with some cutbacks in operating expenditure, the deficit would not likely increase too significantly.

In addition, based on past experiences, development expenditure would not likely be fully utilised given around 93 per cent rate of utilisation in the past four years.

"Should this trend continue, the budget gap may only edge up slightly. The risk, however, lies in the actual growth of nominal Gross Domestic Product (GDP), which may turn out to be lower than government's forecast of 6.8 per cent for 2016," he said.

Specifically, Nor Zahidi said, slower expansion in nominal GDP growth would exert some pressure on budget deficit and Malaysia's total debt.

"Overall, we foresee a downward bias on Malaysia's headline growth if crude oil prices do not rebound in the second half of this year," he added.

Having said that, however, major crude oil forecasters such as the Organisation of Petroleum Exporting Country (OPEC) and International Energy Agency are anticipating lower world liquid surplus by year-end due to the expected reduction in the production by non-OPEC members.

At the same time, shale production is expected to shrink further this year due to the cutback in spending by its players.

This may help improve the sentiment slightly in the second half of this year, Zahidi added.