BIMB Research noted that heading into 4Q25, the trade outlook presents a nuanced mix of supportive tailwinds and emerging volatility.
PETALING JAYA: Malaysia’s external trade is expected to navigate a mixed but increasingly cautious landscape in the final quarter of 2025 (4Q25), as global demand stabilises amid persistent policy uncertainty and renewed US–China tensions.
While September’s stronger trade performance has lifted short-term sentiment, analysts warn that structural risks and geopolitical shifts could limit the pace of export recovery going into next year.
BIMB Research noted that heading into 4Q25, the trade outlook presents a nuanced mix of supportive tailwinds and emerging volatility.
It said the finalisation of US tariff rates in August provided much-needed policy clarity, enabling firms to plan production and investment decisions with greater certainty.
This clarity has been particularly favourable for Asean economies and selected Chinese sectors aligned with US strategic supply chain priorities.
However, BIMB Research cautioned: “The intensifying freight cost battle between the United States and China continues to pressure profit margins, disrupt delivery schedules and strain regional logistics networks.”
The research house kept its 2025 gross export growth forecast at 2.9%, but said the outlook was “becoming more cautious”.
“Although Malaysia successfully secured a negotiated 19% tariff rate with the United States, an external trade slowdown still appears both imminent and unavoidable as global demand stabilises and earlier frontloading momentum fades.”
It added that domestic exports were likely to expand by only 1.2%, reflecting weaker manufacturing and commodity-based activity.
“Taken together, these dynamics warrant a more guarded outlook on Malaysia’s external sector, as global trade realignment continues to introduce both opportunities and risks in the quarters ahead,” BIMB Research said.
Meanwhile, TA Research pointed out that Malaysia’s trade sector has remained resilient so far this year, supported by stronger performance in September.
“In the first nine months of 2025, Malaysia’s exports grew 4.8% year-on-year (y-o-y) to RM1.17 trillion, while imports rose 4% y-o-y to RM1.06 trillion, resulting in a trade surplus of RM105.65bil (13.6% y-o-y),” it said.
The brokerage added that while export momentum had moderated since April, the stronger performance in September may have helped offset potential risks stemming from ongoing global trade policy uncertainties.
Net exports in 3Q25 were described as a “bright spot,” surging by an average of 93.6% y-o-y, marking a sharp turnaround from the 55.9% contraction in 2Q25.
TA Research said the rebound “provides an encouraging signal for Malaysia’s broader economic outlook,” aligning with the Statistics Department’s advance gross domestic product estimate of 5.2% growth for 3Q25.
HLIB Research also highlighted the rebound in domestic exports, which grew 4.2% y-o-y in September compared with a 2.8% decline in August, alongside sustained double-digit growth in re-exports (46.1% y-o-y; Aug: 22.6%).
Still, the brokerage warned of “persistent uncertainty surrounding heightened US-China trade tensions, potential semiconductor tariffs and softer demand from key trading partners.”
The research house expects Bank Negara Malaysia to maintain the overnight policy rate at 2.75% at its November meeting.
Maybank Investment Bank Research maintained a similarly measured view, forecasting full-year export and import growth of 4.8% and 5%, respectively, with a trade surplus of RM142bil.
It said the rebound in exports to the United States in September suggested that exporters are adapting to the new tariff regime as well as frontloading electronics shipments.
However, it cautioned that “the choppy monthly external trade numbers” were likely to persist amid “the risk of product-specific US tariff on semiconductors – a key Malaysia export to the United States – which are currently exempted from the US tariffs.”
September’s export surge of 12.2% y-o-y far exceeded consensus expectations of 3.1% y-o-y, up from 1.7% y-o-y growth in the preceding month.
Imports rebounded by 7.3% y-o-y from a 5.9% contraction, underpinned by stronger consumption imports.
The trade surplus widened to RM19.9bil from RM15.8bil in August.
