Malaysia’s Current Account To Strengthen - Kenanga 

KUALA LUMPUR, Nov 14 (Bernama) -- Malaysia’s current account position is set to improve with tailwinds strengthening through 2025-2026 and a higher projected surplus of 1.8 per cent of gross domestic product (GDP) versus 1.4 per cent previously.

In a note today, Kenanga Investment Bank Bhd said the easing of the United States (US)-China tariff tension in the fourth quarter of 2025 (4Q 2025) has removed a major near-term risk to the trade outlook.

“Together with sustained artificial intelligence (AI)-related demand, this should support further gains in Malaysia’s electrical and electronics exports, particularly in higher-value semiconductor segments.

“On the services side, the surplus is likely to widen, underpinned by rising data-centre and digital-infrastructure investment and stronger tourism receipts ahead of Visit Malaysia 2026, when additional promotions and incentives lift arrivals,” it said.

Kenanga added that a firmer ringgit may create a modest drag at the margin but is unlikely to offset the broader improvement in goods and services balances.

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Overall, the current account should remain comfortably in surplus, even as primary and secondary income deficits persist but narrow and stabilise.

The ringgit’s trajectory is also improving as underlying flow dynamics turn more supportive.

“Foreign demand for Malaysian bonds remains steady, anchored by a stable macro backdrop and clearer fiscal consolidation,” it said.

Export-earnings repatriation is adding further momentum, with foreign exchange deposits reaching RM300 billion in September. A 10.0 per cent drawdown from these deposits could lift the ringgit by roughly 2.7 per cent.

“With the US dollar set to soften on slower US growth, rising fiscal strains and impending Fed cuts, Malaysia remains well-positioned. We maintain the US dollar against the ringgit at 4.08 for end-2025 and 3.95 for end-2026,” it added.

-- BERNAMA