Kuala Lumpur: Malaysia’s Industrial Production Index (IPI), which experienced a year-on-year increase of 2.7 percent in April, is projected to grow at a moderate rate of 2.0 percent in 2025, as reported by MIDF Amanah Investment Bank Bhd.

According to BERNAMA News Agency, the investment bank is maintaining its forecast for a moderation in the IPI growth rate following the Department of Statistics Malaysia’s (DOSM) recent announcement. The DOSM reported a 2.4 percent year-on-year increase in the index for the first four months of this year, compared to 3.6 percent during the same period in 2024.

The IPI recorded an overall growth of 3.8 percent in 2024. However, continued uncertainties, such as higher tariffs and intensified trade tensions, are expected to adversely impact the production of export-oriented products, particularly manufactured goods, due to weaker external demand and a slowdown in global manufacturing activities.

Despite these challenges, MIDF Amanah notes that frontloading and a temporary boost in trade activities could provide support to sectors vulnerable to the external slowdown. The investment bank emphasizes that encouraging progress in ongoing trade talks and the United States’ decision to pause the implementation of reciprocal tariffs are crucial in mitigating the adverse impacts of trade tensions on future demand and production activities.

MIDF Amanah maintains a positive growth forecast for the IPI, expecting production in domestic-oriented sectors to continue growing, supported by expanding domestic demand.