Kuala lumpur: The reduction in United States (US) import tariffs on Malaysian goods from 25 percent to 19 percent is expected to provide a timely boost for Malaysia’s export-oriented manufacturers, said Kenanga Investment Bank Bhd (Kenanga IB). The investment bank said the tariff relief should help restore business confidence and enhance global competitiveness.

According to BERNAMA News Agency, as external conditions stabilize, the manufacturing sector is poised for a gradual recovery towards year-end, supported by the global tech upcycle, rising demand for 5G infrastructure, artificial intelligence (AI) deployment, and a wave of new product launches. These factors, combined with improved trade flows, are expected to help lift output and reinforce broader momentum.

Kenanga IB noted that the manufacturing purchasing managers’ index (PMI) rose to 49.7 in July 2025, slightly below the neutral 50.0 threshold. It highlighted that new orders continued to decline, albeit at the slowest pace in five months, aided b
y a rebound in new export orders, the strongest in eight months. Additionally, finished goods inventories increased, indicating stronger restocking activity.

Against this backdrop, Kenanga IB maintained its 2025 gross domestic product (GDP) forecast at 4.3 percent, compared to 5.1 percent in 2024, driven by resilient domestic demand and continued strength in key domestic-oriented industries. Recent policy measures, such as enhanced cash transfers, low fuel prices, and minimum wage hikes, are expected to bolster household spending, especially in the final quarter of the year.