According to reports from Jin10, Standard Chartered economists Jonathan Koh and Edward Lee stated that due to U.S. tariffs, the Malaysian economy may face headwinds in 2025. 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%, citing 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 the possibility of further cuts.
Due to the inflation rate being lower than expected since the beginning of the year, coupled with weakening oil prices, it is expected that the inflation rate will drop from 2.2% to 1.8%.