FX.co ★ Malaysia Lowers 2025 Growth Forecast Amid Tariff Uncertainty

Malaysia's economy is anticipated to grow between 4% and 4.8% in 2025, according to a statement from Bank Negara Malaysia. This range is a revision from the previous forecast of 4.5% to 5.5%. The central bank identified uncertainties in global trade and tariffs as significant risks to growth, cautioning that the "shifting trade policies and uncertainties surrounding tariffs" affect the global economic outlook. Headline inflation for the current year is expected to average between 1.5% and 2.3%. The bank's revised projections take into account various potential tariff scenarios, ranging from extended tariff increases to more favorable trade outcomes. Despite asserting that Malaysia’s economy is on "strong footing," Governor Abdul Rasheed Ghaffour acknowledged that growth prospects remain susceptible to external risks. Malaysia could face a 25% U.S. tariff on its exports unless an agreement is reached by August 1. The trade minister noted that discussions with Washington are moving forward positively, although some issues concerning non-trade barriers persist.