MALAYSIA'S GDP TO MODERATE AT 4.0 PCT IN 2025 - MIDF AMANAH

KUALA LUMPUR, May 2 (Bernama) -- MIDF Amanah Investment Bank Bhd expects Malaysia’s gross domestic product (GDP) to grow at a moderate rate of 4.0 per cent in 2025, compared to 5.1 per cent in 2024.

This growth projection is backed by ongoing increases in domestic spending, said the investment bank in a research note today. 

MIDF Amanah said its latest projection also assumed that the external trade would grow at a slower pace, taking into account the expected slowdown in demand from major markets like the United States (US), following the tariff hikes announced by the US government.

“We expect Malaysia to be able to sustain growth even if the intensified trade tensions will further hurt the external trade outlook as domestic consumption will continue to grow on the back of positive labour market conditions, rising income, continued cash assistance programme from the government, and increased tourist spending,” it said.

However, MIDF Amanah did not rule out that policy uncertainties and significantly weaker external demand would further constrain activities in the export-oriented sectors, which could pose a larger drag for selected sectors such as manufacturing, mining and agriculture.

“While we do not see the need to shift towards policy easing at the moment, there is sufficient room for Bank Negara Malaysia (BNM) and the government to provide support to the economy if growth momentum weakens significantly,” it added.

Malaysia’s economy continues to grow at a moderate pace, although growth momentum will likely soften with the leading index (LI) in February 2025 unchanged from a year ago, while the coincident index, on the other hand, posted a stronger growth of 2.0 per cent year-on-year, reaching 127.2 points. 

According to the Department of Statistics Malaysia, the annual performance of the LI registered 112.4 points in February 2025, reflecting a marginal decline of 0.004 points.

This is primarily attributable to a substantial contraction in the Number of Housing Units Approved (-34.5 per cent) and by the Real Imports of Other Basic Precious and Other Non-ferrous Metals (-21.5 per cent).

“Amid challenges from higher tariffs and potentially weaker external demand, strong domestic demand, resilient household spending, and higher investments are expected to support national economic growth this year,” MIDF Amanah said.

-- BERNAMA