KUALA LUMPUR: The Ministry of Investment, Trade and Industry (Miti) has projected an increase of at least 5% in Malaysia’s total trade this year, up from RM2.879 trillion in 2024.
However, Minister Tengku Datuk Seri Zafrul Abdul Aziz said the outlook remains subject to external risks including tariffs, new policies and potential trade conflicts.
“Just like the World Bank and the IMF (International Monetary Fund), which regularly revise their GDP growth forecasts due to geopolitical and geoeconomic factors, we will do the same. If you ask me today, my target for Matrade (Malaysia External Trade Development Corporation) is at least 5% growth. But given the challenges and assumptions made, we expect growth to align with GDP growth,” he said during a media conference on the announcement of Miti’s 2024 performance report card and 2025 direction today.
The Finance Ministry has projected Malaysia’s gross domestic product to grow between 4.5% and 5.5% in 2025.
Tengku Zafrul said: “Objectively speaking, I have to admit that when making forecasts, you need to be agile and allow for revisions. So, what I am saying today is the current target. However, if there are tariffs, new measures imposed by other countries, or a trade war, there will be an impact. We cannot deny that. Therefore, we will not hold them accountable for missing the target.”
It is still too early to determine the actual impact of the tariffs imposed by US President Donald Trump will have on the Asean economy, he said, adding that the policies could have positive and negative outcomes.
“On the positive side, the US administration’s inclination towards protectionist policies may encourage investors to seek more stable and neutral markets like Asean. Strategies such as reshoring, decoupling, and derisking could also benefit Asean by driving an increase in foreign direct investment (FDI) and strengthening the region’s position in the global supply chain.”.
On the negative side, Tengku Zafrul said this could disrupt supply chains and may have adverse effects on the Asean economy.
He said shortages of certain goods or commodities could trigger inflation, while the possibility of product dumping due to shifts in export flows could affect local economies.
“Malaysia will continue to monitor and closely observe developments on these issues. Asean must remain neutral, proactive and flexible in addressing these challenges to ensure regional economic stability,” he added.
In 2024, the value of Malaysia’s total trade increased by 9.2% to a record high of RM2.879 trillion, surpassing the RM2 trillion mark for the fourth consecutive year.
Exports exceeded RM1 trillion for the fourth consecutive year, rising by 5.7% to RM1.508 trillion. This figure surpassed 87.2% of the export target set for 2025 under the Mid-Term Review of the 12th Malaysia Plan.
Meanwhile, imports increased by 13.2% year-on-year to RM1.371 trillion, surpassing RM1 trillion for the third consecutive year.
On a separate matter, Tengku Zafrul said free trade agreement (FTA) negotiations between Malaysia and the European Union (EU) are expected to be finalised next year.
He said discussions regarding palm oil have now been successfully resolved between both parties.
“I am pleased to report that palm oil is no longer an issue in this FTA negotiations. We have successfully addressed their (EU’s) concerns by complying with the required standards. However, there are other new areas that we need to focus on. Before we can finalise this matter, there is still a lot to be done.
“Unlike previous FTAs, this one is more comprehensive as it includes digital and green aspects. We want to ensure that this agreement benefits all parties. In any FTA, we must ensure that Malaysian companies are prepared to participate and take advantage of it. Otherwise, the positive impact of this FTA will be difficult to realise.
“My target is to complete the EU FTA by next year. However, the exact date has not been determined, and I will provide updates in due course. I am working hard to make this happen,” he added.
Prime Minister Datuk Seri Anwar Ibrahim and European Commission President Ursula von der Leyen announced the resumption of Malaysia-EU FTA negotiations last month.
The announcement was made during Anwar’s working visit, in his capacity as Finance Minister, to Brussels, Belgium, on January 19-20, 2025.
