Malaysia’s projected GDP growth for 2025 could fall by 0.6 to 1.2 percentage points following the US imposition of a 19% tariff on Malaysian exports, says investment, trade and industry minister Tengku Zafrul Aziz.
In a written parliamentary reply, Tengku Zafrul said the estimate was based on a preliminary analysis by the ministry.
Bank Negara Malaysia has revised its GDP growth projection for 2025 to a range of 4% to 4.8%, down from an earlier forecast of 4.5% to 5.5%.
“For 2026, GDP growth is expected to decrease slightly compared to 2025, as the tariff effects will be felt throughout the year.
“Regarding the impact on inflation in key essential sectors such as transportation, energy, and food, it is still too early to provide precise and conclusive figures,” he said in a written parliamentary reply to Richard Rapu @ Aman anak Beghi (GPS-Betong).
Richard had asked about the short- and long-term impacts of rising global tariffs on inflation, local industrial production costs, and consumer prices, particularly for essential sectors like food, energy, and transportation.
Tengku Zafrul said the government has outlined several measures to mitigate the economic impact of the tariff, which took effect on Aug 7.
These include strengthening cross-ministerial cooperation, encouraging exporters to leverage Malaysia’s 18 free trade agreements, and implementing industrial reforms under the New Industrial Master Plan 2030, the Green Investment Strategy, and the National Semiconductor Strategy.
Additional support measures include RM500 million in easy financing for affected SMEs, a RM25 billion government-linked company reform programme to boost high-value sectors, and continued public service transformation to improve business efficiency.
“The government is confident that the planned measures will effectively and comprehensively address the negative impact of the US reciprocal tariffs without harming public welfare.
“Ensuring access to essential goods for citizens remains a priority in policymaking and strategic initiatives,” Tengku Zafrul said.
On Aug 1, the US announced a 19% tariff on Malaysian exports effective Aug 7, a reduction from the 25% tariff previously imposed.
Semiconductor products are currently exempted from the 19% tariff, but Tengku Zafrul cautioned that Malaysia should remain prepared for the possibility of the US imposing tariffs on the industry amid a review by Washington.
He said Malaysia and the US are still working on a joint statement outlining mutually agreed commitments.
