KUALA LUMPUR, April 14 — Hong Leong Investment Bank (HLIB Research) has maintained its 2025 gross domestic product (GDP) growth forecast at 4.0 per cent following escalating global trade risks.
The investment bank noted that the global manufacturing Purchasing Manager Index (PMI) eased to 50.3 in March, reflecting slower expansion in output and new orders.
The recent pause in US tariff hike gave Malaysia and other countries temporary relief with a flat 10 per cent rate, except for China.
On April 12, the US further exempted smartphones, laptops, memory cards, and flash drives.
“We estimate that about 44.9 per cent of Malaysia’s exports to the US are currently exempted, bringing Malaysia’s effective tariff rate down to 5.5 per cent.
“Nevertheless, the potential escalation of global trade tensions and ongoing uncertainty could weigh on industrial production as companies may hold back orders until there is greater clarity,” it said in a research note.
Public Investment Bank Bhd echoed similar concerns, stating that the expanded scope of US trade restrictions under President Donald Trump presents fresh downside risks to Malaysia’s external sector.
The initial exemption on semiconductors, coupled with further exclusions given by the Trump administration on April 12 and the 90-day pause have nonetheless complicated US policy landscape.
Uncertainty surrounding the durability and scope of these exemptions may weigh on business confidence and delay investment decisions, particularly in electric and electronic and high-value manufacturing.
“With non-exempt sectors remaining vulnerable, and global supply chains under strain, we are revising our 2025 GDP forecast to reflect the compounded impact from direct trade exposure, weaker external demand and broader macro-financial spillovers,” Public Investment Bank said.
Meanwhile, Maybank Investment Bank Bhd said retail trade for the first two months of 2025 rose 5.4 per cent year-on-year (y-o-y), indicating stronger private consumption. It expects private consumption to expand by 5.5 per cent this year, supported by initiatives aimed at boosting consumer incomes.
It also said that the investment upcycle was intact in early 2025 as per the surge in capital goods imports and the banking system’s loans for industrial buildings, factories and lands.
The Statistics Department Malaysia reported last Friday that Malaysia’s Industrial Production Index (IPI) rose by 1.5 per cent y-o-y in February 2025, driven by a rise in the manufacturing sector.
— Bernama
