FX.co ★ Malaysia May Cut GDP Growth Forecast Amid Tariff Uncertainty

Malaysia might have to reconsider its 2025 economic growth projection of 4.5% to 5.5% due to uncertainties surrounding trade and tariffs, as stated by Bank Negara Malaysia Governor, Abdul Rasheed Ghaffour. Despite these concerns, the government opts for a cautious approach, choosing to observe how global trade dynamics unfold before making any revisions to the forecast. During an IMF event in Washington, Ghaffour highlighted that Kuala Lumpur could be subject to a possible 24% U.S. tariff on its exports starting in July unless an agreement is reached. Currently, Malaysia’s trade and second finance ministers are engaged in negotiations in the U.S. The central bank governor reassured that the existing 3% interest rate is conducive to fostering growth and aligns with inflation expectations. Recently, the International Monetary Fund (IMF) adjusted its GDP growth prediction for Malaysia, lowering it to 4.1% for this year, down from its January forecast of 4.7%, consistent with a general downward adjustment in regional forecasts.