CIMB Securities Sdn Bhd is maintaining its forecast for Malaysia’s gross domestic product (GDP) growth at 4.0 per cent for 2025, citing persistent global trade uncertainty and uneven domestic recovery, despite near-term export support and fiscal stimulus.
In a note issued today, the research house said Malaysia’s growth trajectory remains fragile, even as the first four months of 2025 saw a sharp 37.7 per cent rise in capital goods imports, largely driven by businesses front-loading ahead of the United States’ 90-day tariff pause.
“Sustainability beyond the 90-day US tariff pause remains uncertain,” it cautioned.
On the domestic front, private consumption moderated to 5.0 per cent in the first quarter of 2025, down from 5.3 per cent in the final quarter of 2024, despite continued fiscal support including subsidies and cash transfers.
CIMB also noted early signs of cooling in key sectors, including financial services, ICT and automotive sales.
Still, it sees a potential upside should bilateral trade talks with the US progress meaningfully. “Trade de-escalation and encouraging early-stage bilateral trade talks with the United States may offer upside potential to the economic outlook,” it said.
The bank expects inflation to remain subdued, with the year-on-year rate at just 1.5 per cent for the January–April period. This benign inflationary environment could give Bank Negara Malaysia (BNM) scope to reduce its overnight policy rate (OPR) to 2.75 per cent in the third quarter of 2025, it said.
Echoing CIMB’s view, Hong Leong Investment Bank Bhd has also kept its 2025 GDP forecast at 4.0 per cent, well below the official government projection of 4.5 to 5.5 per cent.
“With less than a month remaining in the 90-day negotiation window and no concrete bilateral agreements finalised, downside risks persist,” Hong Leong noted.
It did, however, strike a more optimistic tone regarding broader trade developments, pointing to recent progress in US-China trade talks held in London.
“Officials agreed on a preliminary framework to implement the Geneva trade consensus, which indicates that the US administration may be exploring the possibility of a more favourable deal, rather than pursuing immediate economic decoupling.”
Still, it stressed that “any lasting improvement in trade relations will depend on the successful conclusion of ongoing negotiations.”CIMB Securities Sdn Bhd is maintaining its 2025 gross domestic product (GDP) forecast for Malaysia at 4.0 per cent and believes that Bank Negara Malaysia (BNM) may reduce the overnight policy rate (OPR) in the third quarter of 2025 (3Q 2025).
In a note today, the firm said that even with near-term support from export front-loading, Malaysia’s growth outlook remains clouded by persistent global trade uncertainties and uneven domestic recovery.
“Capital goods imports surged by 37.7 per cent in the first four months of 2025 (4M 2025), but sustainability beyond the 90-day US tariff pause remains uncertain.
“Domestically, private consumption moderated to 5.0 per cent in 1Q 2025 (4Q 2024: 5.3 per cent) despite fiscal support such as cash transfers and subsidies, while early signs of weakening emerged in financial services, information and communication technology, and automotive sales,” it said.
For now, CIMB Securities is maintaining its 2025 GDP growth projection of 4.0 per cent, lower than the government’s projection of 4.5-5.5 per cent.
“Nonetheless, trade de-escalation and encouraging early-stage bilateral trade talks with the United States (US) may offer upside potential to the economic outlook.
“A slower growth outlook and benign inflation (4M 2025: 1.5 per cent year-on-year) will allow BNM room to cut the OPR to 2.75 per cent in 3Q 2025,” it added.
Hong Leong Investment Bank Bhd is also retaining its 2025 GDP growth forecast at 4.0 per cent.
“As for Malaysia’s negotiation with the US, with less than a month remaining in the 90-day negotiation window and no concrete bilateral agreements finalised, downside risks persist,” it said in a separate note.
Nonetheless, recent progress in US-China trade talks held in London offers some optimism.
“Officials agreed on a preliminary framework to implement the Geneva trade consensus, which indicates that the US administration may be exploring the possibility of a more favourable deal, rather than pursuing immediate economic decoupling.
“However, the outlook remains uncertain, and any lasting improvement in trade relations will depend on the successful conclusion of ongoing negotiations,” it added. - June 12, 2025
