KUALA LUMPUR (Reuters) - Malaysia is considering halting the annual Formula One Grand Prix race after its contract ends in 2018 due to declining ticket sales and TV viewership.

The government and race organizers are expected to meet on Thursday to decide whether the country should continue to host the race, state news agency Bernama reported on Monday.

In a series of posts on his official Twitter account, the sports minister Khairy Jamaluddin said the costs of holding the race were too high, while the returns were limited.

"When we first hosted the F1 it was a big deal. First in Asia outside Japan. Now so many venues. No first mover advantage. Not a novelty."

"F1 ticket sales declining, TV viewership down. Foreign visitors down b/c (because) can choose Singapore, China, Middle East. Returns are not as big," he said.

State oil and gas firm Petronas are the title sponsors for the F1 race in Kuala Lumpur. The company has been hit hard in recent times by the tumble in oil prices.

The chief executive of the Sepang International Circuit (SIP), where the races are held, said ticket sales for the race had dropped since 2014 and initial reports showed this year's TV viewership in Malaysia were the lowest in history.

Razlan Razali told state news agency Bernama that although the venue had a 'watertight agreement' with license holders until 2018, a "temporary withdrawal from F1 could be beneficial for the country to take a break".

The Malaysian Grand Prix was last held earlier this month, when Australian driver Daniel Ricciardo claimed his maiden win of the season.

The event was marred by controversy after nine Australians were arrested at the circuit for stripping down to swim wear printed with the Malaysian flag, angering locals who called the act a sign of disrespect.

(Reporting by Rozanna Latiff; Editing by Praveen Menon and Pritha Sarkar)