KUALA LUMPUR: RAM Rating Services Bhd (RAM Ratings) has maintained Malaysia’s gross domestic product (GDP) growth projection at 4% to 5% for 2026, reflecting expectations of continued strength in the domestic economy.
However, RAM Ratings said recent developments may weigh on this year’s outlook, first with the reversion of the United States reciprocal tariffs.
It said the US Supreme Court striking down the reciprocal tariff measures enacted under the International Emergency Economic Powers Act or IEEPA only provided temporary relief to major US trading partners.
“The US government almost immediately followed up with a new 10% global blanket tariff under an alternative law. A further increase to 15% for some countries is also under consideration.
“While both tariff scenarios are less punitive than the 19% tariff under the Agreement on Reciprocal Trade or ART, uncertainty remains elevated,” it said in a statement.
RAM Ratings said it remains cautious about potential new tariffs targeting semiconductors, which could impede Malaysia’s growth momentum.
The rating agency said military strikes conducted by the US and Israel against Iran last Saturday, followed by Iran’s retaliatory attacks on US military bases across several Gulf states, have injected significant geopolitical uncertainty into the region, posing risks to the global oil market, particularly through elevated disruption risks to seaborne oil trade.
“This narrow maritime chokepoint bordering Iran handles close to 30% of global seaborne oil trade, equivalent to around 20% of global oil and petroleum consumption, based on data from 2020 to the first quarter of 2025.
“Iran also accounts for about 3% of global output, making it the fourth-largest producer in the Organisation of the Petroleum Exporting Countries or Opec.
“Taken together, these factors are likely to keep global oil prices elevated in the near term as long as the conflict persists,” it said.
For Malaysia, RAM Ratings said the most immediate direct impact would likely stem from higher oil prices and potential supply disruptions.
This is given that approximately 30% of the country’s mineral fuel imports originate from the Middle East.
However, it said broader trade disruptions are expected to be relatively limited, as the Middle East is not a major trading partner for Malaysia.
“Malaysia’s exports to and imports from the Middle East account for only 1.9% and 4.7% of total exports and imports, respectively,” it added. — Bernama
