GDP may ease to 4pct if US tariffs stay — analyst
CIMB Securities, which maintains a baseline GDP growth forecast of 4.3 per cent for 2025, said the downside risk stems mainly from a potential drag on external demand.
Malaysia's exports contracted 3.5 per cent year-on-year in June, extending the 1.2 per cent decline in May and missing market expectations for a rebound.
The firm said the weakness was broad-based, led by slower shipments of electrical and electronics (E&E), palm oil-based products and metal exports, alongside a sharp drop in crude oil and liquefied natural gas exports.
Manufacturing exports fell 3.3 per cent in June, weighed down by a deceleration in E&E growth to 1.3 per cent from seven per cent in May. Mining exports dropped 28.7 per cent, while agriculture shipments rose 17.5 per cent on stronger palm oil exports.
CIMB Securities said front-loading activity, where exporters rush orders ahead of potential tariffs, had eased, particularly to the US, Taiwan and South Korea.
Exports to the US rose just 4.7 per cent in June compared with a 16.1 per cent jump in May. Similarly, shipments to Taiwan grew 14.2 per cent versus 41.4 per cent previously, while exports to South Korea turned negative at -13.5 per cent.
Shipments to major regional partners also weakened. Exports to China fell 9.3 per cent year-on-year, while those to Asean dropped 13.8 per cent. Exports to the European Union and Hong Kong also moderated.
"With export front-loading easing, Malaysia's growth outlook is clouded by persistent global trade uncertainties and an uneven domestic recovery," the firm said.
Malaysia's trade surplus widened to RM8.6 billion in June as imports also slowed, rising 1.2 per cent from a year ago versus 6.6 per cent in May.
The moderation was largely due to slower capital goods imports, though consumption and intermediate goods imports saw some rebound.
For the first half of 2025, the economy expanded by 4.4 per cent, down from 5.0 per cent in the same period last year.
CIMB Securities maintained its full-year GDP forecast at 4.3 per cent but flagged that the outcome of US-Malaysia tariff negotiations could tilt the balance.
"The sustainability of trade and investment momentum beyond the 90-day US tariff pause remains uncertain," it said.
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