KUALA LUMPUR: Bank Negara Malaysia has revised its 2025 growth forecast to 4.0 per cent to 4.8 per cent, down from its earlier projection of 4.5 per cent to 5.5 per cent, in response to evolving global economic conditions.
The central bank said the updated gross domestic product outlook takes into account a range of tariff scenarios, from the continued escalation of trade barriers to more favourable outcomes from ongoing trade negotiations.
The forecast remains subject to uncertainties surrounding the global economy, both on the downside and upside, it said in a statement today.
Bank Negara said favourable trade negotiation outcomes, pro-growth policies in major economies, continued demand for electrical and electronic goods, and robust tourism activity could raise Malaysia’s export and growth prospects.
It said the global growth outlook is affected by shifting trade policies and uncertainties surrounding tariff developments, as well as geopolitical tensions.
“As a small open economy, Malaysia’s growth prospects will be shaped by these developments. It is to Malaysia’s advantage that our economy is facing these external headwinds from a position of strength.”
The central bank added that the latest indicators, including advanced estimates for the second quarter growth, continue to point towards sustained strength in economic activity.
It said domestic demand has been resilient and will continue to support growth going forward. Favourable labour market conditions, particularly in domestic-oriented sectors and policy measures will continue to drive private consumption.
“Meanwhile, expansion in investment activity will be sustained by progress in multi-year infrastructure projects, continued high realisation of approved investments and catalytic initiatives under the national development plans,” Bank Negara said.
Bank Negara governor Datuk Seri Abdul Rasheed Ghaffour said the Malaysian economy remains resilient despite global uncertainties, supported in part by structural reforms implemented over the years.
“The sustained strength in economic activity and moderate inflation provides a supportive environment to pursue structural reforms for a more resilient and competitive Malaysia in the future,” he added.
Bank Negara said headline inflation is projected to remain moderate, averaging between 1.5 per cent and 2.3 per cent in 2025, lower than the earlier forecast of 2.0 per cent to 3.5 per cent.
The central bank said the updated projection reflects the more moderate cost and demand outlook since March 2025.
“Inflationary pressure from global commodity prices is expected to remain limited, contributing to moderate domestic cost conditions. In this environment, the impact of domestic policy measures is expected to remain contained,” it said.
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