RHB MAINTAINS MALAYSIA’S 2025 GDP GROWTH FORECAST AT 5.0 PCT

KUALA LUMPUR, Feb 14 (Bernama) -- RHB Investment Bank Bhd (RHB IB) has maintained its forecast for Malaysia's gross domestic product (GDP) growth at 5.0 per cent in 2025, driven by ongoing multi-year projects, rising household incomes, and improving global monetary conditions.  

In a note, the bank said private consumption is expected to benefit from a favourable labour market, a minimum wage increase to RM1,700 in February 2025, and salary adjustments for civil servants.

“Investment activity is likely to be boosted by the ongoing development of multi-year projects and business-friendly policies and incentives targeting key sectors such as technology, tourism, and export-oriented industries.  

“Initiatives under the Economy MADANI framework, including critical plans like the National Energy Transition Roadmap and the New Industrial Master Plan 2030, are expected to stimulate medium-term investment,” it said.  

RHB IB said exports and export-driven industries will gain from easing global monetary conditions, resilient growth in major economies, and the continued tech upcycle.  

“Our global economic outlook remains positive, with three key trends expected to unfold in 2025—resilient global economic growth, slower global inflation, and lower global interest rates,” it stated.  

Despite its optimism, the bank highlighted risks, including a potential drag on consumer spending due to reduced disposable income from subsidy retargeting and weaker trade performance in 2025, driven by protectionist policies in developed markets.  

Locally, it noted that the government’s subsidy retargeting, which focuses on the T15 group, suggests the remaining 85 per cent of the population should not see a sharp rise in the cost of living.  

“Malaysia's inflation is expected to remain manageable at a projected 2.4 per cent for 2025, with aggregate consumption remaining resilient,” it added.  

RHB IB remains cautious about potential spillover effects on Malaysia’s trade and manufacturing sectors amid rising protectionism and escalating global trade tensions.  

The growth and export outlook remains uncertain due to risks from tariff policies and their impact on global supply chains and inflation.  

It said that although Malaysia’s export sectors are unlikely to be directly affected by US protectionism due to its low trade deficit with the US, spillover effects from major trade partners, particularly China, and weakening regional demand could weigh on the electrical and electronics sector.

“A return to protectionist policies could escalate US-China tensions, affecting Malaysia's role in China-centric supply chains.  

“To mitigate risks, Malaysia may strengthen ties with trade blocs such as the Regional Comprehensive Economic Partnership, BRICS, and ASEAN, while its domestic economic strength could help buffer external shocks,” the bank added.

-- BERNAMA