KUALA LUMPUR (XINHUA) – Malaysia’s economic growth is expected to moderate to 4.9 per cent in 2025 from a projected 5.2 per cent in 2024, KSI Strategic Institute for Asia Pacific said yesterday.
The think tank said in a report that the growth projection takes into account the counter-reaction from the ongoing domestic policies and the heightened external challenges as the global economy braces for the so-called ‘Trump 2.0’.
Malaysia, being an open economy, will be directly or indirectly affected by United States (US) President-elect Donald Trump’s tariff threats this time, it added.
Still, it said domestic demand will be the main engine of growth.
According to the think tank, 2024 has been a stellar year for the Malaysian economy, thanks to healthy domestic demand, robust investment activities, stronger external demand and a stable political climate.
Meanwhile, the think tank cautioned that the country’s currency, Malaysian ringgit (MYR), will face a mixed outlook this year, shaped by the global economic environment, domestic growth, and commodity price fluctuations.
“With moderate global growth, stable oil prices, and strong export demand, the MYR could see gradual appreciation,” it said.
Its base case scenario suggests the MYR is likely to trade within a range of 4.00 to 4.20 to the US dollar in 2025. “If Malaysia’s economy performs well and global demand for its exports remains strong, the MYR could appreciate towards the stronger end of this range,” it said.
However, it noted geopolitical tensions, higher US interest rates, and domestic inflation could pose challenges for the currency, leading to volatility.
