KUALA LUMPUR: Malaysia’s economy is projected to post another year of growth in 2025, although at a more moderate pace of 4.6 per cent, according to AmBank (M) Bhd chief economist Firdaos Rosli.
The forecast aligns with the lower end of the official projection range of 4.5 to 5.5 per cent.
Firdaos said growth risks are tilted slightly to the downside, driven by external factors such as potential trade disruptions from protectionist measures and heightened geopolitical tensions stemming from the ongoing conflicts in the Middle East and between Russia and Ukraine.
«Against this backdrop, growth is expected to be more domestically driven, supported by the government’s proactive measures,» he said at the bank’s macroeconomic outlook briefing today.
Firdaos said the extent of US President Donald Trump’s policy actions remains uncertain, though the bank’s baseline scenario assumes a partial implementation of his proposed tariffs.
He added that recent statements from Trump and his administration indicated that higher tariffs might be used as a strategic tool in trade negotiations.
«In our view, any additional tariffs imposed are likely to be more targeted, focusing on products that directly compete with US manufacturers, some of which have already been subject to high tariffs.
«For example, solar cell imports from Malaysia have faced a general duty of 9.1 per cent since October 2024.
«Even if Trump moves ahead with his proposed blanket tariffs, obtaining Congressional approval is not a straight line, even with the Republicans having control of the US Congress,» he added
On the ringgit, Firdaos the Malaysian economy has ample room to expand over the next 12 months, keeping the local currency in a relatively favourable position against its peers.
«On top of that, an investment upcycle appears to be already underway, according to our macro team.
«This could yield healthier growth and higher productivity down the road, standing in contrast to the multiple headwinds confronting other major and regional economies.
As a result, we think the ringgit remains well supported by a healthy domestic outlook,» he added.
AmBank projects the US dollar-ringgit exchange rate to reach RM4.45 against the greenback by year-end.