Kuala Lumpur:Malaysia's economic growth is projected to encounter external risks in 2027, including geopolitical uncertainties, US trade protectionism, and elevated interest rates in advanced economies.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid highlighted that ongoing conflicts in the Middle East and protectionist policies under US President Donald Trump's administration are significant external developments that require attention.

Dr. Mohd Afzanizam noted that the major risks are primarily external, with the persistent war in West Asia and widespread protectionist measures from the Trump administration. Additionally, he pointed out the recent increase in interest rates, particularly in the bond markets of advanced economies like the US, Europe, and Japan. Although economies can continue to grow, he warned that there might be a need to lower interest rates eventually.

He added that while the global economic cycle is currently stable, there remains a possibility of an economic downturn in the next three to four years. Domestically, if a general election takes place next year, foreign institutional investors are likely to scrutinize policy developments, the political climate, and the dynamics of Malaysia's political alliances.