IMF: Malaysia's real GDP growth forecast raised to 4.5% in 2025, 4.0% in 2026
In itsJuly 2025 World Economic Outlook (WEO)update released today, titled'Global Economy: Tenuous Resilience amid Persistent Uncertainty', the IMF said the forecast for 2025 is 0.4percentage point higher than in the reference forecast of the April 2025 WEO and 0.2 percentage point higher for 2026.
Meanwhile, the IMF said that in the emerging marketand developing economies, growth is expected to be 4.1 per cent in 2025 and 4.0 per cent in 2026.
"Relative to the forecast in April, growth in 2025 for China is revised upward by 0.8 percentage point to 4.8 per cent. This revision reflects stronger-than-expected activity in the first half of 2025 and the significant reduction in US-China tariffs,' it said.
Additionally, it said China's growth in 2026 is also revised upward by 0.2 percentage point to 4.2 per cent, again reflecting the lower effective tariff rates.
"In India, growth is projected to be 6.4 per cent in 2025 and 2026, with both numbers revised slightly upward, reflecting a more benign external environment than assumed in the April reference forecast,' it said.
The IMF highlighted that despite global uncertainties, countries should reduce policy-induced uncertainty by promoting clear and transparent trade frameworks.
"Pragmatic cooperation is paramount in instances in which some rules of the international trading system, in their current form, may not be functioning as intended.
"This entails the pursuit of multilateral initiatives on the global commons and modernising trade ruleswhere feasible, while seeking plurilateral or regional solutions on other matters,' it said.
Moreover, the IMF said bilateral negotiations can help defuse trade tensions and should aim to reduce trade and investment barriers while not increasing them toward third parties, which could escalate tensions with other trading partners.
"Such negotiations should be pursued with the ultimate aim of addressing the root causes of tensions: specifically, excess external imbalances arising from internal policy choices. This would involve identifying and taking steps to resolve the underlying distortions for a more durable solution.
"Broad subsidies and industrial policies aiming to protect exports can be costly and distortive,' it said.
The IMF said central banks must carefully calibrate monetary policies to country-specific circumstances to maintain price and financial stability amid prolonged trade tensions and evolving tariffs.
"In countries imposing tariffs on trading partners -- either by initiating or by retaliating -- these actions constitute supply shocks.
"Hence, central banks in these countries face a difficult trade-off between shielding the real sector and preventing the expected one-off increase in prices from turning into persistently higher inflation.The trade-off becomes more pertinent if inflation is already above target,' it said.
According to the report, further easing of monetary policy should then depend on having convincing evidence that inflation and inflation expectations are heading decisively back to target.
"Countries that have not imposed tariffs, by contrast, face a demand shock. Central banks could, in this case, gradually reduce the policy rate,' it said. - Bernama
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Barnama
an hour ago
- Barnama
Ringgit Ends Slightly Lower Against US Dollar Ahead Of Fed Rate Decision
Ringgit Ends Slightly Lower Against US Dollar Ahead Of Fed Rate Decision By Durratul Ain Ahmad Fuad KUALA LUMPUR, July 30 (Bernama) -- The ringgit reversed its morning gains to close slightly lower against the US dollar today, as traders turned cautious ahead of the United States (US) Federal Reserve's (Fed) interest rate decision, amid uncertainty over a potential cut. At 6 pm, the local note eased to 4.2410/2455 versus the greenback from yesterday's close of 4.2320/2365. The two-day Federal Open Market Committee (FOMC) meeting, taking place from July 29 to 30 in Washington, is expected to provide key guidance on the Fed's monetary policy direction. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit was higher against the US dollar during the morning session at RM4.2278, but weakened later in the day. However, he said the ringgit's weakness was capped by positive news following the International Monetary Fund's (IMF) upward revisions to global and Malaysian gross domestic product (GDP) forecasts. 'The IMF has revised its 2025 global GDP growth forecast from 2.8 per cent to three per cent, citing that the front-loading activities and the US's willingness to reduce tariffs have helped improve the economic outlook. 'By extension, Malaysia's 2025 GDP was revised upward from 4.1 per cent to 4.5 per cent. Improved trade predictability should be viewed positively, as this would enhance the contribution from the external demand,' he told Bernama. Mohd Afzanizam opined that trade negotiations with the US among various countries, including Malaysia, remain an ongoing affair, as both parties continue to seek a middle ground to address the trade imbalances. 'Perhaps, this will set the right context for the 13th Malaysia Plan (13MP), which will promote structural reforms that could be beneficial for the ringgit in the long run,' he added. The 13MP will be tabled on Thursday by Prime Minister Datuk Seri Anwar Ibrahim in Parliament. At the close, the ringgit ended lower against major currencies. It fell against the Japanese yen to 2.8646/8678 from 2.8479/8511 at the close on Tuesday, depreciated versus the British pound to 5.6745/6805 from 5.6518/6578 yesterday, and edged lower against the euro to 4.8996/9048 from 4.8990/9042 previously. The ringgit was mixed against regional peers. It was lower against the Indonesian rupiah at 258.5/258.9 from yesterday's 257.8/258.2, weakened against the Singapore dollar to 3.2919/2957 from 3.2875/2913, but improved against the Philippine peso to 7.36/7.38 from 7.38/7.39, and inched up versus the Thai baht to 13.0528/0719 from 13.0537/0740 previously. -- BERNAMA
The Sun
3 hours ago
- The Sun
13MP – Malaysia's growth prospects closely linked to global developments, domestic challenges
KUALA LUMPUR: Prospects for the country's economic growth are closely linked to the global economic environment, which is expected to moderate during the 13th Malaysia Plan (13MP) period due to various current challenges, according to the 13MP Main Document 2026-2030, themed 'Redefining Development'. The document, citing projections from the International Monetary Fund (IMF), expects the global economy to grow at a rate of 3.1% per year, while global trade is forecast to increase by about 3% per year during 2026 to 2030. 'This growth is driven by emerging markets and developing economies at a rate of 4% per year. Rapid economic growth, especially in South America, Africa, Middle Eastern countries, and Eastern Europe, creates new global trade and investment opportunities,' the document said. However, it also stated that retaliatory measures by other countries against US trade tariffs are expected to affect international trade. In addition, ongoing geopolitical tensions, such as those between Russia and Ukraine and Israel and Palestine, along with uncertainties from conflicts between India and Pakistan and Iran and Israel, are expected to disrupt global supply chains and increase production costs and commodity prices. At the same time, large-scale global changes or mega trends will have significant impacts not only on Malaysia's economic growth but also on the well-being of its people. Key factors include shifts in dominance and the landscape of economic blocs, uncertainties in global trade policies, disruptive technological developments, demographic structural shifts, and global health crises that could pose threats that need to be addressed, according to the document. 'However, at the same time, these mega trends also create opportunities that the country can leverage. The US tariff war in 2025 puts pressure on the world and needs to be managed strategically to reduce the impact on the economy,' it added. Domestically, Malaysia still faces several issues and challenges, including slow changes in economic structure, low-quality investment, slow adoption of technology, limited fiscal space, high dependence on imports, and an inefficient labour market. Furthermore, low social mobility and the climate change crisis also impact the wellbeing of the people and the environmental ecosystem, the document added. – Bernama
Malay Mail
3 hours ago
- Malay Mail
Everlasting City: Kaifeng's Cultural Renaissance Thrilled SCO Partners
Millennium City Park (Qingming Riverside Landscape Garden) KAIFENG, CHINA - Media OutReach Newswire - 31 July 2025 - Recently, the Shanghai Cooperation Organization Media and Think Tank Summit was held in China's Henan Province, with guests visiting the ancient capital of Kaifeng. They came from over 20 countries and regions, including Russia, Kazakhstan, Pakistan, Egypt, and Nepal. Immersed in the cultural legacy and vibrant development of this city that served as the capital of eight dynasties, they savored the beautiful moments of cultural integration and heartfelt summit, themed "Upholding the 'Shanghai Spirit' to Build a More Beautiful Home", designated Kaifeng as a key destination for foreign guests from its in China's heartland along the Yellow River, Kaifeng boasts a history of over 4,100 years as a settled urban center and served as the capital of eight dynasties. Most notably, during the Northern Song Dynasty (960–1127), it thrived for 168 years as both a political hub and one of the world's most bustling renowned British historian Arnold Joseph Toynbee once said, "Given the choice, I would choose to live in China's Song Dynasty." In his eyes, the Song Dynasty, with its economic prosperity, cultural brilliance, and social openness, was "the finest age for human life".A glimpse of Kaifeng past lingers in, the timeless masterpiece by Northern Song painter Zhang Zeduan: along the Bian River, shops pressed close in a lively cluster, boats and carriages thronged the waters and roads, and crowds bustled with life. Thanks to an open society and abundant resources, ordinary life in the Northern Song Dynasty began to bloom with extraordinary richness and vitality. History was no longer solely the grand tale of emperors and nobles; in the bustle of markets and the warmth of daily toil, it etched its most touching dynasties fade, the pulse of daily life endures. Modern Kaifeng integrates Song Dynasty aesthetics into ordinary existence, embedding ancient elegance within morning bells, evening drums, and the rhythm of daily through Kaifeng's streets resembles stepping into a classical Chinese scroll. Waterways crisscross the city, linking ancient buildings with gray tiles and red walls. On imposing city gates, vivid yet time-honored woodblock New Year paintings burst with life. The fragrance of tea drifts through the lanes, and the melodies of Yuju opera curl endlessly along the Bian River. In classrooms, children recite Song poems with ease. Around every corner, unexpected treasures await: Kaifeng Prefecture, Daxiangguo Temple, Longting, Daliang Gate, and the Ruins of Zhouqiao Bridge. Every inch of the city whispers: History has never left but lives in Kaifeng people's daily routines and flows through the city's very Millennium City Park (Qingming Riverside Landscape Garden) was a highlight of the guests' visit. This Song culture-themed park recreates scenes from. Over 200 Song-style structures, including government offices, taverns, and tea houses, stand in orderly rows. More than 800 performers in Song-era costumes wander through, staging over 100 distinctive shows. Here, over 20 intangible cultural heritages are on display, featuring Bian embroidery, the "Four Arts of Song Dynasty", woodblock New Year paintings, and Northern Song official porcelain. This 600-mu (98.8-acre) "living museum" does more than replicate the painting's scenes. Through its innovative integration of scene restoration, cultural performances, and tech-driven interaction, visitors gain a firsthand sense of the "bustle of crowds and buzz of markets" that characterized life in the Northern Song Dynasty."This is my first visit to Kaifeng. Its beauty transports me through time to the Northern Song Dynasty's glorious heyday," remarked Nikita Kornev, Executive Director of the Center for China and Asia-Pacific Studies, Ural Federal University, an unbroken cultural legacy and the enduring pulse of daily life define the soul of a cherished home, then humanity's indomitable spirit forms the very core that builds millennia, the Yellow River's roaring floods, thick with silt, have repeatedly devastated Kaifeng. Yet, with unwavering resilience, the people here have rebuilt their homes time and this timeless resilience finds perfect expression in the paulownia trees that tower toward the the same day, other guests visited Lankao County. They were deeply moved by the story of Jiao Yulu, who, over 60 years ago, led Lankao's people in fighting sandstorms and planting paulownias to restore the ecosystem. Ahmed Hassan Ahmed Mohamed Moustafa, Owner and Director of the Asia Center for Studies and Translation, noted that he was profoundly impressed by China's achievements in poverty alleviation. He further observed that Lankao's remarkable development, driven by afforestation and other efforts, offers valuable insights that could be adopted in his own the paulownias planted to tame desertification have grown into towering giants. Locals discovered that paulownia wood makes an exceptional material for traditional musical instruments, as it resists warping and offers excellent breathability and acoustic properties. Today, the traditional instrument industry has become one of Lankao's pillar economic sectors. Guzheng zithers, pipa lutes, and other instruments crafted from local paulownia not only sell well across China but also reach markets in numerous countries and Kaifeng, a city where ancient charm weaves with modern vitality and economy thrives alongside culture, this confidence finds expression in melodies unbroken through generations, diverse elements advancing in harmony, exchanges that deepen mutual understanding, and differences cherished amid shared #Kaifeng The issuer is solely responsible for the content of this announcement.
