Malaysia’s economy remains on a “strong footing” and may expand 4.0%-4.8% this year, the central bank said on Monday, days ahead of the US tariff deadline.
The latest forecast, compared to its previous projection for a 4.5%-5.5% growth, takes into account various tariff scenarios, ranging from a continued elevation of tariffs to more favourable trade negotiation outcomes, Bank Negara Malaysia (BNM) said in a statement. The pace of expansion however will be slower than 5.1% growth in 2024.
“The Malaysian economy remains resilient despite global uncertainties,” said BNM Governor Datuk Seri Abdul Rasheed Ghaffour. “This is, in part, the outcome of structural reforms that we have undertaken over the years.”
Malaysia’s economy expanded at 4.5% in the second quarter from a year earlier, a tad faster than the 4.4% year-on-year growth in the first three months of the year, as resilient consumer demand offset weaker exports, official flash estimates showed.
“The latest indicators, including advance estimates for the second quarter growth, continue to point towards sustained strength in economic activity,” BNM said on Monday. “Domestic demand has been resilient and will continue to support growth going forward.”
Headline inflation, meanwhile, could be cooler than previously expected thanks to a more moderate cost and demand outlook, and could average between 1.5% and 2.3% in 2025, according to BNM’s latest forecast. That compares to its previous expectations for consumer prices to rise 2.0%-3.5% this year.
“Inflationary pressure from global commodity prices is expected to remain limited, contributing to moderate domestic cost conditions,” the central bank said on Monday. “In this environment, the impact of domestic policy measures is expected to remain contained.”
Last week, Prime Minister Datuk Seri Anwar Ibrahim announced a one-off cash handout, lower RON95 petrol prices, and a freeze to scheduled highway toll increases, among other measures that the government hopes will help ease cost-of-living challenges.
Source: theedgemalaysia