- Malaysia revises 2025 GDP growth amidst US tariff tensions.
- Malaysia’s 2025 growth outlook now 4%-4.8%, inflation 1.5%-2.3%.
- Global trade tensions affect Malaysian economy and investor confidence.
Bank Negara Malaysia has revised its 2025 GDP growth forecast to 4%-4.8%, citing trade tensions and US tariffs on exports.
This recalibration highlights economic uncertainties and could trigger adjustments in investor risk models and asset allocations.
Bank Negara Malaysia has revised its 2025 GDP growth projection to 4%–4.8%. The adjustment reflects concerns over global trade tensions, including 25% tariffs on Malaysian exports by the US.
Abdul Rasheed Ghaffour, the BNM Governor, highlighted risks linked to US tariffs. Officials are cautiously optimistic about more favorable trade outcomes, potentially impacting economic policy and planning.
The 25% US tariffs on Malaysian exports may affect industries reliant on international trade, impacting growth rates. Market analysts anticipate possible shifts in investor sentiment and volatility in local financial markets.
Malaysia’s inflation forecast has been adjusted to 1.5%–2.3%. Changes in trade dynamics can influence domestic production costs and, consequently, consumer prices. The central bank emphasizes a robust approach to mitigate these economic uncertainties.
Malaysia’s efforts to ensure tariffs fall below 20% are ongoing. Trade negotiations with the US are in progress, demonstrating the country’s resilience amid challenging economic conditions.
Historically, growth downgrades have led to currency depreciation and increased hedging. Market behavior may repeat, rendering Malaysian equities vulnerable to external economic shocks. Monitoring risk indicators will be vital to navigate these changes effectively. “The updated growth projections account for various tariff scenarios, ranging from a continued elevation of tariffs to more favourable trade negotiation outcomes.” – *Abdul Rasheed Ghaffour, Governor, Bank Negara Malaysia*
