RESEARCH FIRMS RAISE MALAYSIA'S 1Q 2025 GDP FORECAST TO 4.5-4.6 PCT
BUSINESS
KUALA LUMPUR, May 14 (Bernama) -- Research firms have projected a higher gross domestic product (GDP) of between 4.5 and 4.6 per cent from 4.4 per cent previously for the first quarter of 2025 (1Q 2025), ahead of this Friday's announcement.
According to Maybank Investment Bank Bhd, this is premised on 'slightly faster growth' for the services sector of 5.3 per cent year-on-year (y-o-y) versus 5.2 per cent and agriculture (0.8 per cent y-o-y).
'Smaller contraction in mining sector is projected at -3.2 per cent y-o-y, slower expansion in construction (13.9 per cent) and manufacturing (4.2 per cent),' it said in a research note.
Meanwhile, Hong Leong Investment Bank Bhd (HLIB) also revised up its 1Q 2025 GDP growth estimate to 4.5 per cent y-o-y, above Statistics Department Malaysia's advance estimate of 4.4 per cent y-o-y, supported by sustained, albeit moderating, expansion in the services, manufacturing and construction sectors.
It also maintained expectations for Malaysia's economic growth to moderate to +4.0 per cent y-o-y in 2025 on the back of sustained domestic demand, supported by employment and wage gains, further bolstered by supportive fiscal policy measures.
'While the US has initiated a pause on tariff rates on its trading partners, including Malaysia and China, the higher tariff rates compared to last year and the fluidity of trade policy could make businesses adopt a more cautious stance towards major investment and hiring plans,' it said.
Echoing HLIB, CIMB Investment Bank Bhd said the estimated 4.5 per cent in the 1Q 2025 GDP growth is expected to be driven by a slower pace of construction at 16.6 per cent y-o-y compared to the 23.1 per cent in 4Q 2024 and easing industrial output (2.3 per cent versus 3.4 per cent in 4Q 2024)
'Quarterly growth in distributive trade volumes held steady at 4.3 per cent y-o-y in 1Q 2025 (4Q 2024: 4.4 per cent), but overall services volume growth moderated to 5.3 per cent in 1Q 2025 (4Q 2024: 6.1 per cent), weighed down by slower expansion in the food and beverages, finance and insurance, info and communication, private education, healthcare, and recreation subsectors,' it said.
CIMB said global headwinds, including US trade policy uncertainty and US-China tensions, cloud Malaysia's growth outlook.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
Pakistan hopes to advance Asean partnership status: Envoy
A tourist vehicle drives through a deserted road in Pahalgam in Indian controlled Kashmir, Thursday, May 15, 2025. Malaysia has offered to mediate in the wake of the April 22 attack in Pahalgam, Indian-administered Kashmir, which left 26 people dead and sharply raised tensions between the two neighbours. - AP KUALA LUMPUR: Pakistan is hoping to elevate its standing with Asean from a sectoral dialogue partner to a full dialogue partner, said its High Commissioner to Malaysia, Syed Ahsan Raza Shah. Syed Ahsan said Pakistan, Asean's sectoral dialogue partner since 1993, has long valued its engagement with the regional bloc and looks forward to deepening cooperation. "The matter has been discussed between the Prime Minister of Pakistan and the Prime Minister of Malaysia,' he said at a media briefing here, Friday (June 6). He added that Pakistan views Asean as a key platform for promoting regional peace and stability, fostering economic cooperation, and advancing shared development. In October last year, media reports quoted Prime Minister Datuk Seri Anwar Ibrahim as saying that Pakistan has Malaysia's full support in its bid to become a full dialogue partner of Asean. Meanwhile, Pakistan also Anwar's offer to mediate in the Kashmir conflict, citing his respected standing and close ties with both India and Pakistan as key to easing tensions in the region. Syed Ahsan said Anwar's good relations with the leadership of both countries could play a constructive role in easing tensions between the South Asian neighbours. "Anwar expressed his willingness to engage in dialogue between the two countries after being informed of the postponement of the Pakistani Prime Minister's visit on May 9,' he said. Syed Ahsan highlighted that the call between Anwar and Pakistani Prime Minister Shehbaz Sharif had taken place in the first week of May, just days before fighting broke out in Kashmir. On May 5, Malaysia's offer to mediate comes in the wake of the April 22 attack in Pahalgam, Indian-administered Kashmir, which left 26 people dead and sharply raised tensions between the two neighbours. Following the incident, Anwar expressed Malaysia's willingness to assist in de-escalating the situation, citing its good relations with both parties. - Bernama
New Straits Times
2 hours ago
- New Straits Times
US-China renewed dialogue seen lifting Malaysia's trade outlook
KUALA LUMPUR: Renewed trade talks between the United States and China are expected to boost investor confidence and strengthen Malaysia's trade momentum, an economist said. Putra Business School economist Professor Dr Ahmed Razman Abdul Latiff said any move to reduce tariffs between the two economic giants could steady the sails for Malaysia by boosting confidence and trade visibility. "If the US and China agree to resume talks and reach a deal to reduce tariffs on each other, Malaysia's trade environment and investor sentiment will become less volatile and uncertain," he told Business Times. "This would boost investor confidence and encourage continued investment in Malaysia," Razman added, noting that while tensions persist, Malaysia is taking steps to shield its economy. Razman also expects Malaysia's export markets and supply chains to remain competitive, although growth may moderate slightly. This, he said, is supported by ongoing efforts to diversify export destinations, grow the country's trading partnerships and enhance intra-Asean trade. Should US-China negotiations break down again, he said the impact on Malaysia would likely remain limited. "There will be some negative impact but it will be minimum as majority of Malaysia's products such as semiconductor will not be subjected to higher tariffs by the US," he said. Trump and Xi held a 90-minute phone conversation on Thursday, marking their first direct dialogue since Trump resumed office. The call, widely viewed as a positive step towards easing the prolonged trade tensions between the world's two largest economies, laid the groundwork for renewed bilateral cooperation and the resumption of high-level trade negotiations. Both leaders agreed to restart trade talks, with senior US officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, expected to meet their Chinese counterparts. The timing and venue for these negotiations have yet to be finalised but are anticipated to be announced in the coming weeks. Although the call sparked market optimism, US stocks closed lower as a sharp decline in Tesla shares outweighed the positive momentum from progress in US-China tariff negotiations. Tesla shares plunged over 14 per cent in heavy trading as the escalating public feud between Trump and businessman Elon Musk rattled investors, wiping out about US$150 billion in market value. Razman downplayed concerns over the spat saying, "The impact on Malaysia will be minimal, as the fallout primarily affects the SpaceX program and Tesla production."
The Sun
2 hours ago
- The Sun
Billion-dollar battery plant pauses construction in US amid electric vehicle, tariff uncertainty
NEW YORK: A Japanese company has halted construction on a US$1.6 billion factory in South Carolina to help make batteries for electric BMWs, citing 'policy and market uncertainty,' reported Xinhua quoting the Associated Press. 'While Automotive Energy Supply Corp. (AESC) didn't specify what those problems are, South Carolina's Republican governor said the company is dealing with the potential loss of federal tax breaks for electric vehicle buyers and incentives for EV businesses as well as tariff uncertainties from President Donald Trump's administration,' noted the report. 'What we're doing is urging caution -- let things play out because all of these changes are taking place,' Governor Henry McMaster said. AESC announced the suspension in construction of its plant in Florence on Thursday. 'Due to policy and market uncertainty, we are pausing construction at our South Carolina facility at this time,' the company's statement said. AESC promised to restart construction, although it didn't say when, and vowed to meet its commitment to hire 1,600 workers and invest US$1.6 billion. The company said it has already invested US$1 billion in the Florence plant. The battery maker based in Japan also has facilities in China, the United Kingdom, France, Spain and Germany. In the United States, AESC has a plant in Tennessee and is building one in Kentucky. The statement didn't mention any changes with other plants.
