KUALA LUMPUR: Malaysia’s economy is anticipated to moderate to 4.4 per cent in the first quarter of 2025 (1Q2025), from 5.0 per cent in the previous quarter, according to the Malaysian Rating Corp Bhd (MARC).
This is attributed to declining mining and manufacturing output, although domestic demand, along with the services and construction sectors, has remained resilient, the ratings agency stated today.
MARC said that inflation stayed subdued at 1.4 per cent in March, but upside risks may arise from the recently implemented minimum wage hike and the upcoming RON95 fuel subsidy rationalisation.
“Despite trade headwinds, exports rose by 6.8 per cent in March, led by electrical and electronics, palm oil, and machinery, particularly to the United States, Hong Kong, and Singapore.
“However, exposure to new US tariffs would pose risks, although the affected countries are likely to cope through ongoing supply chain diversification,” it said.
MARC said that the ringgit rebounded in April after initially weakening following Donald Trump’s tariff announcement, helped by the 90-day tariff pause and broader dollar weakness.
“A shift in investor sentiment, supported by regional currency appreciation and reduced demand for the US dollar, also drove renewed capital inflows.
“Foreign investors withdrew RM4.7 billion from equities, but this was more than offset by increased buying in the bond market, recording net inflows of RM2.8 billion for the overall capital markets,” it added.
