According to data from Jin10, Standard Chartered economists Jonathan Koh and Edward Lee stated that Malaysia's economy may face headwinds in 2025 due to U.S. tariffs. Although consumer spending and investment remain key to economic expansion, declining demand from trading partners will weigh on growth.
They have revised down the GDP growth forecast from 5% to 4.2% due to lower-than-expected growth in the first quarter and tariff disruptions. It is anticipated that the Malaysian central bank will 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 until now, coupled with weakening oil prices, it is expected that the inflation rate will drop from 2.2% to 1.8%.