KUALA LUMPUR, Jan 20 — Malaysia is expected to maintain a solid 2025 growth rate of 5.0 per cent, supported by both domestic and external growth drivers, despite elevated risks from a potential trade war escalation.
In a note today, CIMB Securities and Market Research said the forecast is consistent with the government’s target of 4.5-5.5 per cent.
“This reflects strong domestic spending supported by robust investments and resilient consumer spending, alongside continued external demand recovery driven by the global tech upcycle.
“Nevertheless, downside risks remain elevated, emanating from a potential escalation of trade tensions that could pose a risk to global inflationary pressures.
“This may lead to global central banks adopting a more cautious approach to their monetary easing policies, potentially dampening growth prospects,” it said.
According to advance estimates, Malaysia’s gross domestic product (GDP) growth may have moderated to 4.8 per cent year-on-year (y-o-y) in the fourth quarter of 2024 (4Q 2024), below market expectations, owing to slower manufacturing growth and declines in agriculture and mining output.
“Nevertheless, growth was backed by solid growth in services and construction activities. Given the advance estimate for 4Q 2024, the Malaysian economy is expected to register full-year growth of 5.1 per cent for 2024, missing our 5.2 per cent estimate,” it said.
Meanwhile, Maybank Investment Bank Bhd (Maybank IB) expects 2025 real GDP growth to moderate slightly to 4.9 per cent on the back of sustained growth momentum in the services sector and manufacturing, and improvement in mining amid moderation in construction and agriculture.
“Domestic tailwinds, namely resilient demand driven by firmer consumer spending, continued investment upcycle due to the robust investment approvals in 2021-2024, the take-off in the Johor-Singapore Special Economic Zone and new major infrastructure projects, will be key to mitigate external headwinds amid the evolving news flows on Trump 2.0’s and US Fed’s policies,” it said.
— Bernama
