KUALA LUMPUR: Malaysia’s economic growth is expected to remain resilient this year, supported by continued progress on multi-year projects, rising household incomes, and easing global monetary conditions, RHB Investment Bank (RHB IB) said.
In a note today, the investment bank remained optimistic on the economic landscape and maintained its gross domestic product (GDP) forecast of 5.0 per cent for 2025 compared to Bank Negara Malaysia's (BNM) projected range of 4.5 per cent to 5.5 per cent.
"Private consumption is expected to benefit from favourable labour market conditions, a minimum monthly wage increase and salary adjustments for civil servants.
"Investment activity is likely to be boosted by the ongoing development of multi-year projects and business-friendly policies and incentives targeting key sectors such as technology, tourism, and export-oriented industries,” it said.
RHB IB said initiatives under the MADANI Economy framework, including critical plans like the National Energy Transition Roadmap and New Industrial Master Plan 2030, are expected to stimulate medium-term investment.
Nevertheless, it expressed concern over the potential negative spillover impact on Malaysia's trade and manufacturing sector outlook amid rising protectionism and the potential escalation of trade tensions among major economies.
The export outlook is clouded by uncertainties surrounding tariff policies and the subsequent impact on global supply chains and inflation, it said.
"Our key conviction is that Malaysia’s economy remains relatively unscathed by the direct impact of United States (US) trade protectionism policies, as Malaysia is not a primary target for US tariffs.
"We are more concerned about the potential spillover effects of slower demand from Malaysia's trade partners, particularly China and the US, should trade tensions escalate,” it explained.
Meanwhile, the investment bank said, inflation pressures are expected to remain manageable, supported by easing global costs and the absence of significant demand pressures, though there is some potential upside from domestic policy measures.
"Headline inflation for 2025 is projected to range from 2.0 to 3.5 per cent. Our inflation projection for 2025 remains at 2.4 per cent, with inflationary risks expected to stay subdued at this stage,” it added.
On the monetary policy, RHB IB said the Overnight Policy Rate is expected to remain at 3.00 per cent for the rest of 2025, assuming steady economic prospects and manageable inflation pressures.
"There is lack of impetus for policy adjustments, assuming GDP growth and inflation fall within the projected range,” it added. - Bernama
