Kuala Lumpur: Maybank Investment Bank Bhd (Maybank IB) has reiterated its projection of a 4.9 per cent growth for the Malaysian economy in 2025 and an inflation rate of 3.0 per cent for the year.

According to BERNAMA News Agency, Maybank IB’s group chief economist Suhaimi Ilias explained that the push pressure from fuel subsidy rationalisation would not be significant, and the implementation of two-tier pricing for RON95 petrol would limit the upside risks to inflation.

Suhaimi highlighted that RON95 contributes 5.0 per cent to the Consumer Price Index (CPI). If the government were to simply float the price of RON95, a 40 per cent increase in petrol price is estimated, which would add 2.0 percentage points to the current 2.0 per cent inflation rate. However, with the two-tier pricing strategy, assuming 85 per cent of consumers continue to enjoy subsidised RON95, the impact on inflation would be limited to 0.3 percentage points.

Discussing economic growth, Suhaimi noted that risks are more skewed to the downside, influenced by the implications of US President-elect Donald Trump’s policies on global trade and the US Federal Reserve’s interest rate decisions. Maybank IB anticipates no significant change in the Overnight Policy Rate in 2025, maintaining the benchmark rate at 3.0 per cent throughout the year.

For the FBM KLCI, the investment bank targets the benchmark index to reach 1,740 by the end of 2025, driven by sectors such as banking, consumer, and healthcare, while remaining selectively positive on data centre-related construction, as well as oil, gas, and technology.

Saktiandi Supaat, Maybank’s head of foreign exchange research, projected the US dollar/ringgit pair to peak at approximately 4.70 by the end of the second quarter, before the ringgit strengthens to about 4.45 against the greenback later in the year. He attributed this support for the ringgit to expected and actual investments, highlighting positive sentiment from the Johor-Singapore Special Economic Zone, contrasting the economic and investment climate with that of the 2018 trade war period.