KUALA LUMPUR: Malaysia will maintain its 2025 growth forecast of 4% to 4.8% despite global uncertainties, Tengku Datuk Seri Zafrul Abdul Aziz told CNBC’s Squawk Box Asia on Monday (Aug 18).
The Investment, Trade and Industry Minister told interviewer Martin Soong that the Malaysian economy grew 4.4% in the first half, though the second half will be more challenging.
Tengku Zafrul stressed that Malaysia will not retaliate against US tariffs, calling the US both Malaysia’s largest export market and top investor.
“We can’t afford to retaliate as what’s important is to engage,” he said.
On semiconductors, which make up 60% of Malaysia’s exports to the US, the minister said the sector supports about 100,000 direct jobs.
He added that Malaysia has trained 15,000 engineers under its National Semiconductor Strategy, targeting 60,000 by 2030.
Despite tariff uncertainty slowing some new projects, long-term investment interest remains strong.
On rare earths, he confirmed Malaysia has banned raw exports, requiring all mining to go through local processing and downstream activities.
Both US and China-linked companies are welcome to invest under this policy, provided Malaysia remains neutral and consistent.
Tengku Zafrul also revealed that Malaysia has concluded a free trade agreement with South Korea, to be signed later this year.
Negotiations with the EU, GCC, India and an upgraded Asean-China FTA are also ongoing, with a focus on digital and green trade.
He said Malaysia has tightened rules on transshipment by requiring Certificates of Origin to be issued directly by the government, in order to prevent tariff circumvention.
The minister stressed that Malaysia’s priority is to stay neutral and consistent in its trade policies, while focusing on supply chain security and resilience to keep the country central in global technology and resources industries.
