Standard Chartered predicts a slowdown in Malaysia's economic growth in 2025, with the central bank likely to cut interest rates.

According to data from Jin10, Standard Chartered economists Jonathan Koh and Edward Lee stated that Malaysia's economy could face headwinds in 2025 due to U.S. tariffs. Although consumer spending and investment remain key to economic expansion, declining demand from trade partners will weigh on growth.

They have downgraded the GDP growth forecast from 5% to 4.2% due to first-quarter growth being below expectations and tariff disruptions. The Bank Negara Malaysia is expected to cut interest rates by 25 basis points in July, bringing the policy rate down to 2.75%, with further cuts possible.

Due to the inflation rate being lower than expected from the beginning of the year to now, along with weakening oil prices, it is expected that the inflation rate will drop from 2.2% to 1.8%.