PETALING JAYA: Malaysia’s external trade prospects for 2025 appear promising despite facing potential risks from global economic uncertainties, evolving trade policies and geopolitical tensions, according to research houses.
Analysts expect the nation’s strategic advantages, bolstered by global demand recovery and technological advancements, to sustain trade growth.
CIMB Research highlighted the favourable global economic backdrop and Malaysia’s preparedness to adapt to shifting trade dynamics.
“Malaysia’s external trade outlook remains supported by the ongoing recovery in global demand amid the tech upcycle and global monetary policy easing that will likely stretch into 2025, despite potential tariff headwinds from US protectionist policies,” it stated.
CIMB Research projects export growth of 5.3% and import growth of 5.6% in 2025, aligned with a 5% gross domestic product (GDP) growth forecast.
Malaysia’s external trade performance in December 2024 exceeded expectations, with export growth surging 16.9% year-on-year (y-o-y), driven by robust demand for electrical and electronic (E&E) products, metal manufactures and palm oil.
Imports also accelerated, rising by 11.9% y-o-y, while the trade surplus widened to RM19.2bil. For the entirety of 2024, export and import growth stood at 5.7% and 13.2%, respectively.
Looking ahead, CGS International (CGSI) Research predicts a strong first half of 2025 (1H25) for Malaysia’s exports, followed by potential moderation.
“We expect strong shipments to continue in 1H25 with greater downside risks in 2H25 amid the potential impact of higher tariffs on the global supply chain,” CGSI Research commented.
However, the brokerage acknowledged Malaysia’s resilience, citing its positive growth in the export-oriented sectors of E&E, machinery and transport equipment. CGSI Research also pointed to global semiconductor sales, forecasted to rise by 11.2% in 2025, as a factor underpinning Malaysia’s trade growth.
Meanwhile, BIMB Research projects Malaysia’s gross exports to grow by 3.9% in 2025, supported by re-exports and domestic export expansion.
“Malaysia stands to benefit from potential front-loading of exports in the first half of 2025, as exporters anticipate possible tariff implementations. Additionally, Malaysia could gain through the re-exports channel, driven by trade diversion efforts from multinational companies,” BIMB Research noted.
However, it cautioned against downside risks such as weaker global demand, volatile commodity prices and geopolitical tensions, which could disrupt trade flows.
The potential resurgence of US-China trade tensions under the Trump 2.0 administration was cited as a key concern by analysts.
“The Trump 2.0 administration’s prospective trade and tariff policies present significant downside risks to Malaysia’s external trade sector. These policies could have wide-ranging regional implications, particularly if China faces substantial impacts,” BIMB Research cautioned.
Hong Leong Investment Bank Research shared a similar sentiment, noting that Malaysia’s diversified export structure and neutral stance in global trade could offer some insulation.
“The global trade outlook remains clouded by rising economic uncertainty, particularly in light of possible shifts in trade policy.
“Nevertheless, Malaysia’s export performance is expected to be partly cushioned by its neutral stance, diversified exports structure and potential trade diversions amid a renewed US-China trade war,” it said, maintaining its 2025 GDP growth forecast at 4.9%.
Despite the challenges, Malaysia’s strong trade infrastructure and ability to adapt to global shifts position it well for 2025.
CIMB Research noted: “Although trade and political uncertainties pose downside risks, Malaysia’s strategic location, advanced trade infrastructure and proactive policy measures position it well to capitalise on opportunities in the shifting global trade environment.”
