Economists stay put on GDP projections for 2025


PETALING JAYA: Economists are mostly maintaining their projections for Malaysia’s economic growth for 2025 on the back of resilient domestic demand even as the pace of growth for the fourth quarter ended Dec 31, 2024 (4Q24) as measured by gross domestic product (GDP) may have slowed down.

Advanced estimates released by the Statistics Department last Friday showed that GDP for 4Q24 may have risen 4.8% year-on-year on the back of solid growth from the more domestic-oriented services and construction sectors of the economy.

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This was below market expectations for a 5.2% growth for the quarter. 3Q24 GDP grew 5.3%. CIMB Securities Research, which has maintained GDP growth for this year at 5%, said growth would be reflective of strong domestic spending supported by robust investments and resilient consumer spending, alongside continued external demand recovery driven by the global technology upcycle.

The government estimates GDP to grow 4.5% to 5.5% in 2025 and 4.8% to 5.3% for 2024, with the advanced 4Q24 GDP expected to bring 2024 GDP to 5.1%.

However, both CIMB Securities and Hong Leong Investment Bank (HLIB) Research warned that external risks would continue to shadow the economy on renewed trade tensions that could spur inflation and led central banks to remain hawkish on monetary policy.

Bank Negara, whose monetary policy committee meets on Jan 22, is widely expected to maintain the overnight policy rate (OPR) at 3%.

CIMB Securities said growth prospects could be dampened should global central banks adopt a more cautious stance on monetary policy while HLIB, which has maintained this year’s GDP at 4.9%, said besides external risks, domestic policy reforms involving the RON95 petrol subsidy and wage increases could force policymakers to maintain the OPR at 3%.

HLIB Research also noted that sustained tourism activities and healthy investment intentions would also be expected to support growth. It estimates total investments from January to September 2024 at RM254.7bil as compared to RM230.2bil from the same period in 2023.

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GDP , CIMB , HLIB , projection , forecast

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