Pic by Samsul Said/Bloomberg
KUALA LUMPUR: Bank Negara has maintained its overnight policy rate (OPR) at 3%, in line with the expectations of economists.
The central bank's benchmark lending rate has remained unchanged since May 2023, with the latest decision deeming the rate "supportive of the economy and consistent with the current assessment of inflation and growth prospects".
According to the monetary policy statement issued on Thursday, the central bank expects the strength in Malaysian economic activity to be sustained in 2025, anchored by domestic demand, despite external uncertainties.
"Employment and wage growth, as well as policy measures, including the upward revision of the minimum wage and civil servant salaries, will support household spending," it said.
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Meanwhile, a robust expansion in investment activity will be sustained by the progress of multi-year projects in both the private and public sectors, the continued high realisation of approved investments, as well as the ongoing implementation of catalytic initiatives under the national master plans.
Bank Negara noted that the outlook for global growth, inflation and trade is subject to considerable uncertainties surrounding tariff and other policies from major economies and geopolitical developments.
This is anticipated to lead to a more moderate pace of expansion in Malaysian exports. Bank Negara added, however, that the global tech upcycle, continued growth in non-electrical and electronics, as well as higher tourist spending, are expected to provide support.
"The growth outlook is subject to downside risks from an economic slowdown in major trading partners following significant uncertainties surrounding trade policies and lower-than-expected commodity production.
"Meanwhile, growth could be lifted by greater spillovers from the global tech upcycle, more robust tourism activity, and faster implementation of investment projects," said Bank Negara.
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The central bank said inflation in 2025 is expected to remain manageable amid the easing global cost conditions and the absence of excessive domestic demand pressures.
"Upside risk to inflation would be dependent on theextent of spillover effects of domestic policy measures, as well as external developments surrounding global commodity prices, financial markets and trade policies."
