SME BANK PROJECTS MALAYSIA’S GROWTH AT 4.5-5.0 PCT FOR 2025

KUALA LUMPUR, March 12 (Bernama) -- Malaysia’s growth is projected to range between 4.5 per cent and 5.0 per cent, reflecting positive sentiment in the overall economy, according to the Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank).

Its acting group president and chief executive officer, Datuk Mohammad Hardee Ibrahim said Malaysia’s gross domestic product (GDP) growth accelerated to 5.1 per cent year-on-year (y-o-y) in 2024, which is well within the bank’s in-house estimate of 4.3-5.3 per cent.

“This was driven by stronger household spending and supported by favourable labour market conditions, robust investment, and recovery in external trade.

“Riding on the back of this positive momentum, we forecast Malaysia’s GDP for 2025 to register between 4.5 per cent and 5.0 per cent,” he said in a statement today.

As a leading development financial institution, the bank said it remains committed to supporting small and medium enterprises (SMEs) as a key pillar of Malaysia’s economy, adding that it has published its 2025 Economic Outlook Report, providing insights to help SMEs navigate the year ahead.

Commenting on Malaysia’s outlook, SME Bank’s chief economist Lynette Lee Li Qing said Malaysia’s GDP growth in 2025 is expected to be driven by expansion in the services sector, with increased support from consumer and business-related subsectors.

“Going forward, we remain cautiously optimistic on Malaysia’s overall growth performance in 2025 amid rising headwinds, mainly stemming from the external side such as slower GDP growth in key trading partners, potential escalation of the United States – China trade war and rising global protectionist policies, volatile geopolitical conflicts as well as lower than expected commodity production and prices,” she added.

The bank said its growth forecast for this year aligns with the latest projection by the World Bank’s economic outlook in January 2025, which targets global growth to stabilise at 2.7 per cent in 2025 and 2026.

Additionally, Malaysia’s role as the ASEAN chair in 2025 is also expected to boost the tourism segment in the lead-up to Tourism Malaysia Year 2026.

The bank also noted that measures such as higher cash handouts to lower-income households, an upward revision of civil servants’ salaries, and an increase in the minimum wage to RM1,700 from RM1,500 are expected to boost consumer spending.

It added that this stabilisation is driven by easing inflation, lower commodity prices, and monetary easing across advanced and emerging economies.

-- BERNAMA