MAYBANK IB PROJECTS 4.9 PCT GDP GROWTH, 3.0 PCT INFLATION RATE IN 2025

KUALA LUMPUR, Jan 14 (Bernama) -- Maybank Investment Bank Bhd (Maybank IB) has reiterated its projection of a 4.9 per cent growth for the Malaysian economy in 2025 and an inflation rate of 3.0 per cent for the year. 

Its group chief economist Suhaimi Ilias said the push pressure as a result of fuel subsidy rationalisation would not be significant and the implementation of two-tier pricing for RON95 petrol would also limit the upside risks to inflation. 

“RON95 contributed 5.0 per cent to the Consumer Price Index (CPI). If the government simply floats the price of RON95, we estimate that there would be a 40 per cent increase (in petrol price) and that would basically add 2.0 percentage points to inflation from where we are now, which is just 2.0 per cent.

“But if the government adopts the two-tier pricing for RON95, and assuming that they are successful in ensuring 85 per cent of consumers or petrol users still enjoy subsidised RON95, the weighted average increase of fuel price in CPI would only have an impact of 0.3 percentage point on inflation,” he said during a virtual media briefing on Maybank IB's 2025 outlook today.

On economic growth, Suhaimi said the risks were tilted more to the downside depending on the implications of US President-elect Donald Trump's policies on global trade as well as the US Federal Reserve's interest rate path.

Maybank IB also expects no significant change in the Overnight Policy Rate in 2025, forecasting the benchmark rate remaining at 3.0 per cent throughout this year. 

For the FBM KLCI, the investment bank targets the benchmark index to hit 1,740 by end-2025, mainly driven by the banking, consumer, and healthcare counters, while it is selectively positive on the construction sector, mainly data centre-related counters, as well as oil and gas and technology.

Meanwhile, Maybank head of foreign exchange research Saktiandi Supaat said the US dollar/ringgit pair was expected to peak at about the 4.70 level by the end of second quarter this year, before the ringgit eventually tapering back to about 4.45 against the greenback during the remaining period of the year. 

He noted that there would be support for the ringgit moving forward following the expected investments and actual investments going forward. 

“As for the Johor-Singapore Special Economic Zone, it helps to add some positive sentiment onto Malaysian assets and I think that has helped to make things a bit different in the current context or environment from an economic or investment angle compared to what it was back in 2018 when the first trade war happened,” he added. 

-- BERNAMA