Kuala lumpur: Bank Negara Malaysia (BNM) has revised Malaysia’s 2025 gross domestic product (GDP) growth projection to between 4.0 per cent and 4.8 per cent from the previously estimated range of 4.5 per cent to 5.5 per cent. The new projection considers various tariff scenarios, encompassing both continued tariff elevation and more favorable trade negotiation outcomes.
According to BERNAMA News Agency, the central bank stated that the forecast remains subject to uncertainties surrounding the global economy. These uncertainties present both potential challenges and opportunities for growth. The bank highlighted that favorable trade negotiation outcomes, pro-growth policies in major economies, sustained demand for electrical and electronic goods, and strong tourism activity could enhance Malaysia’s export and growth prospects.
BNM Governor Datuk Seri Abdul Rasheed Ghaffour commented on the resilience of the Malaysian economy amidst global uncertainties. He attributed this resilience to structural reforms implemented over the years. He noted that the sustained strength in economic activity and moderate inflation provide a conducive environment for pursuing further structural reforms to ensure a more resilient and competitive Malaysia in the future.
The central bank also projected that headline inflation would remain moderate, averaging between 1.5 and 2.3 per cent in 2025. This projection reflects a more moderate cost and demand outlook since March 2025. BNM expects limited inflationary pressure from global commodity prices, which will contribute to moderate domestic cost conditions. In this environment, the impact of domestic policy measures is anticipated to remain contained.
BNM acknowledged the considerable changes in the global economic landscape since the March 2025 announcement of Malaysia’s GDP growth forecast in its Economic and Monetary Review. It noted that shifting trade policies, uncertainties surrounding tariff developments, and geopolitical tensions are affecting the global growth outlook. As a small open economy, Malaysia’s growth prospects will be influenced by these developments. However, the economy is well-positioned to face these external challenges.
The central bank emphasized that recent indicators, including advanced estimates for second-quarter growth, continue to demonstrate sustained strength in economic activity. It noted that domestic demand has been resilient and will continue to support growth in the future. Favorable labor market conditions, particularly in domestic-oriented sectors, and policy measures will continue to underpin private consumption.
Furthermore, BNM projected that investment activity will expand, driven by progress in multi-year infrastructure projects, continued high realization of approved investments, and catalytic initiatives under national development plans.