THE government is considering revising its 2025 GDP growth forecast in light of the recent US tariff hikes, with the final decision depending on the outcome of ongoing discussions, according to Finance Minister II, Datuk Seri Amir Hamzah Azizan.
In an interview at the 12th ASEAN Finance Ministers and Central Bank Governors Meeting, Amir Hamzah revealed that Malaysia's central bank, Bank Negara, is currently assessing the economic data related to the US tariffs, which were announced last week.
"The tariff announcement was just the initial salvo," he said. "As discussions progress, things may evolve, and we may need to adjust our GDP projections based on the final outcome."
Malaysia's GDP growth forecast for 2025 had initially been set between 4.5% and 5.5%. However, the Finance Minister suggested that if the trade situation worsens, the government would reassess these projections.
"If the final outcome proves to be more challenging, we would revise our growth estimates accordingly," he added. "For now, we are still navigating through the situation."
Amir Hamzah acknowledged the global challenges posed by the trade tensions but stressed the importance of maintaining a calm and pragmatic approach. "We need to be realistic.
This is a challenging environment for the global economy, but practical and composed minds will help us move forward," he said.
The government has also been engaging in talks with the United States, with a focus on regional cooperation and diversifying trade to mitigate the impact of the tariffs. "We are working with our regional partners to explore how we can collaborate better and diversify," he noted.
"Once the situation is more clearly defined, we will adjust our growth outlook—whether positively or negatively—accordingly."
Addressing concerns about the strength of the Malaysian ringgit, Amir Hamzah highlighted the country’s open economy and reiterated Bank Negara's commitment to market stability.
"Although the country has faced volatility in the past, a stable and predictable environment is ultimately beneficial in the long run," he said.
In response to the US tariff situation, the government has set up a special committee, headed by Prime Minister Datuk Seri Anwar Ibrahim, to analyse the potential impacts and formulate appropriate responses. "The Prime Minister’s committee will look into the situation and determine the necessary steps to take," Amir Hamzah explained.
US President Donald Trump’s recent announcement of new tariffs, which include a 24% levy on goods entering the United States, will begin on 9 April. Malaysia has stated that it will not consider retaliatory tariffs, despite the impact on some of its exports.
The tariff hikes are part of a broader US trade policy targeting countries with significant trade deficits, although not all Malaysian goods are affected.
Despite the turbulence in global financial markets, Amir Hamzah emphasised Malaysia's resilience. "As we've seen, the past week has been particularly challenging for financial markets worldwide, but in comparison, the Malaysian market has been much more stable," he said.
"This is due to the strong institutional support in the country, which has helped to stabilise the market."
He added that the current market volatility presents an opportunity for investors to consider long-term investments in Malaysia. "Periods of market fluctuations are natural, but we shouldn't panic. Instead, we should look at the opportunities available," he said.
Amir Hamzah concluded by stressing that the government's primary focus remains on strengthening the nation's financial institutions to ensure long-term economic stability.
"Our goal is to continue reinforcing the country's financial institutions to secure the economic well-being of Malaysia in the future," he said. – April 7, 2025
