Maybank Estimates April GDP Lower At 4.8%, Reflects Recent IPI Data

BusinessToday

17-06-2025

Malaysia's economic growth moderated in April 2025, with Maybank Research estimating gross domestic product (GDP) expansion at 4.8% year-on-year, down from 6.0% in March and 6.2% in April last year. The slowdown reflects a mixed bag of industrial and trade performance, with strength in manufacturing and exports partially offset by weaker mining output and softer consumer demand.
The moderation was largely driven by a weaker Industrial Production Index (IPI), which grew 2.7% year-on-year in April compared to 3.2% in March. While manufacturing activity picked up to 5.6% (Mar: +4.0%), sharp declines in mining (-6.3%) and continued contraction in electricity output (-1.6%) weighed on overall industrial growth.
Manufacturing gains were powered by stronger output in both export-oriented and domestic industries. Export-oriented production rose 6.4% (Mar: +4.8%), with notable growth in: Electronics & Electricals: +9.9% (Mar: +13.2%)
Vegetable & Animal Oils & Fats: +22.8% (Mar: +10.6%)
Chemicals & Chemical Products: +4.7% (Mar: +4.9%)
Domestic-oriented manufacturing also saw steady expansion at 3.9% (Mar: +2.3%), supported by increased production of food processing products, fabricated metal goods, basic metals, and non-metallic mineral products.
The drag from the mining sector was significant, reflecting lower production of crude oil and condensates (-0.7%) as well as natural gas (-10.0%). Electricity output declined for the second straight month. However, crude palm oil (CPO) production rebounded sharply (+12.3%) after a brief contraction in March.
Domestic trade activity lost some momentum, with the Distributive Trade Index rising 4.3% in April (Mar: +5.0%). Retail trade growth slowed to 3.4% (Mar: +4.9%), while motor vehicle sales remained tepid at 0.8%. Wholesale trade, however, posted a slight improvement at 6.6% (Mar: +6.3%).
Malaysia's external trade saw strong recovery in April, with export values surging 16.4% year-on-year and volumes up 15.6%. Imports also jumped by 20.0% in value and 24.5% in volume, following contractions in March. Despite this rebound, the downtrend in intermediate goods imports raises caution about future manufacturing momentum.
Private Consumption Holds Steady
Private consumption remained resilient in the first four months of the year, with retail trade growing 4.7% year-on-year—slightly ahead of 2024's pace of 4.4%. Maybank maintains its full-year forecast for private consumption growth at 5.3%, supported by a healthy job market and various government initiatives, including: Civil service pay and pension reviews
Minimum wage hikes
Increased cash assistance under Budget 2025
Income tax reliefs for the middle-income group
The investment upcycle appears to be continuing, with strong capital goods imports and steady financing for industrial construction indicating sustained business confidence. However, Maybank cautioned that the trajectory could face headwinds if the weakness in intermediate goods imports persists.
While April's data showed mixed signals, Maybank notes that Malaysia's economy continues to find support from domestic demand and export recovery. However, with certain leading indicators pointing to a possible softening ahead, the growth trajectory for the remainder of the year remains subject to downside risks. Related