logo
Multitude of positive factors entrench Malaysia's economy on growth trajectory

Multitude of positive factors entrench Malaysia's economy on growth trajectory

The Suna day ago
KUALA LUMPUR: Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour has expressed optimism that Malaysia's economy remains on a strong growth trajectory due to multiple factors, such as resilient domestic demand and encouraging exports of electrical and electronic (E&E) products, despite headwinds from impending tariffs.
The central bank governor said today that among the combination of positive factors supporting the economy are the frontloading of exports in the first six months, robust tourism activity that could raise Malaysia's export prospects, low unemployment and rising wages.
Moreover, he highlighted that about 85 per cent of Malaysia's exports go to markets other than the United States (US).
While uncertainties remain, particularly surrounding the final shape and scale of the US tariffs, BNM's revised growth forecast of 4.0 per cent to 4.8 per cent has taken into account multiple scenarios, including potential trade disruptions.
'We have accounted for a range of tariff scenarios, including both favourable and less unfavourable trade negotiations outcomes as well as pro-growth policies in major economies.
'A diversified export structure will help contain the direct effect from the US, as around 85 per cent of exports are to non-US markets, and no single market accounts for more than 15 per cent of Malaysia's exports,' he told Bernama in an exclusive interview.
Abdul Rasheed noted that Malaysia's exports are spread across a wide range of products, consisting of E&E (40 per cent), non-E&E manufacturing goods (46 per cent) and commodities (14 per cent).
He said almost half of the demand for Malaysian exports comes from Advanced Asia (19.4 per cent) and ASEAN countries (29 per cent).
Domestically, Abdul Rasheed highlighted that domestic demand drives more than 90 per cent of Malaysia's economic growth.
'Consumption is still resilient despite the tariff announcement, it's still resilient because income is still growing. Wages are still on an increasing trend, he said.
In terms of unemployment, Abdul Rashee said that the rate is at three per cent and is lower than before the Covid-19 pandemic.
'People have jobs. These are things that will support the consumption,' he said, adding that the government's ongoing policy support measures remain in place and support the growth.
On July 23, Prime Minister Datuk Seri Anwar Ibrahim announced a cost-of-living relief package, which includes a one-off RM100 SARA cash aid, a reduction in the RON95 fuel price, toll hike postponements, and an expanded Rahmah Madani Sales allocation.
'This will also provide some kind of spending from the rakyat and drive our domestic consumption,' he added.
Turning to investments, Abdul Rasheed said Malaysia recorded RM378 billion in approved investments last year, with over half coming from domestic sources.
He said these are tied to long-term national development plans and are expected to sustain momentum through this year and into 2026.
In terms of exports, which are likely to be moderate in the second half of 2025 (2H 2025) as tariffs take effect and global growth slows, BNM expects E&E exports to continue supporting growth.
Abdul Rasheed said this is underpinned by resilient demand for E&E and emerging opportunities in the artificial intelligence-related segment.
'So this is where I think the question comes on tariffs. Exports will definitely be affected; everything in the world will be affected. However, if you look at global trade numbers, they are still growing.
'Despite the challenging global environment, exports remained supportive of growth in 1H 2025, helped by robust growth in E&E exports.'
'Frontloading activities ahead of anticipated tariff increase contributed to stronger export performance in the second quarter of 2025, although this has tapered down particularly in June,' he said.
Abdul Rasheed highlighted that inbound tourism was also expected to provide support for exports in 2H 2025, driven by higher flight connectivity, visa exemptions and promotional activities leading to Visit Malaysia 2026.
He said international visitor arrivals into Malaysia were 16.9 million from January to May 2025, which is 20 per cent higher than the same period in 2024.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

[9pm] Legal weed brings peace of mind to Moroccan farmers, but black market pays more, faster
[9pm] Legal weed brings peace of mind to Moroccan farmers, but black market pays more, faster

Malay Mail

time20 minutes ago

  • Malay Mail

[9pm] Legal weed brings peace of mind to Moroccan farmers, but black market pays more, faster

More farmers cultivating cannabis legally this year Illegal market still dominant due to profits, lack of red tape Recreational cannabis farming remains banned BAB BERRED (Morocco), July 30 — Beneath the blazing summer sun, Abderrahman Talbi surveyed the neat rows of flourishing cannabis blooms in compact fields, reflecting on how his life has changed since he joined Morocco's burgeoning legal cannabis industry two years ago. Like many farmers in the northern Rif mountains who have long grown the crop illegally, Talbi is relieved that raids and seizures by the authorities are no longer a worry. 'I can now say I am a cannabis farmer without fear,' Talbi told Reuters. 'Peace of mind has no price.' Talbi's pivot to legal farming is an example of what Morocco, one of the world's biggest cannabis producers, hoped to achieve when it legalised cultivation for medical and industrial use, but not for recreational purposes, in 2022. Regulating cannabis farming brought with it hopes for fresh revenue and economic revitalisation in the impoverished Rif region. The step made Morocco a forerunner among major producing countries and the first in the Middle East and North Africa to join a global trend that has seen countries like Canada, Germany and Uruguay legalise production and use. It also hoped to lure farmers away from the illegal economy in the restive Rif mountains, where cannabis production has long been tolerated to facilitate social peace. Al Hoceima, a major city in Rif, saw the largest protests in Morocco in 2016-17 over economic and social conditions. A Moroccan farmer checks on a bundle of dried cannabis in Ketama, in the northern Rif mountains. — Reuters pic Black market's lure persists Legalisation efforts have gained traction, with about 5,000 farmers joining the industry this year, from just 430 in 2023, says Morocco's cannabis regulator, or ANRAC. And legal production surged to nearly 4,200 tonnes last year, a 14-fold increase over the first harvest in 2023. Still, the black market remains dominant and lucrative due to demand for recreational use from Europe and regionally in Africa, potentially undermining efforts to fully regulate the sector. Morocco has 5,800 hectares (14,300 acres) of legally planted land, according to ANRAC. That's dwarfed by illegal cultivation spanning over 27,100 hectares, Interior Ministry data shows. While many farmers still choose illicit cultivation, they face the risk of increased crackdowns by authorities, which led to the seizure of 249 tonnes of cannabis resin by September last year, up 48 per cent from all of 2023, according to the Interior Ministry. Mohammed Azzouzi, 52, spent three years in hiding for cannabis-related charges before receiving a royal pardon along with over 4,800 others last year. Now, he is preparing for his first legal harvest and hopes to earn more than the 10,000 dirhams (US$1,100) he used to make in the illegal economy each year. Red tape The country's prohibition on growing cannabis for leisure use, along with bureaucratic red tape, limit legal farming, with every stage of the supply chain requiring a specific license from ANRAC, discouraging many a farmer from making the switch. A grower who wants to cultivate legally needs to join a licensed cooperative, which buys the farmer's product and processes it into derivatives or sells the resin to other licensed manufacturers. Talbi's cooperative, Biocannat, near the town of Bab Berred, 300 km (186 miles) north of Rabat, bought about 200 tonnes of cannabis last year from some 200 farmers, processing it into resin, supplements, capsules, oils and powders for medical and cosmetic purposes. About 60 km east of Biocannat, in the main producing area of Issaguen, farmer Mohamed El Mourabit was initially hopeful about the legalisation plan in 2021, but is less so now. 'The process is too complicated,' he said. And money talks, as well, for many farmers, who are lured by the higher rewards of the black market, despite its risks. While cooperatives take months to pay farmers about 50 dirhams per kilogram for the raw plant, on the illicit market, processed cannabis resin can fetch up to 2,500 dirhams per kilogram, farmers and activists say. To close that gap, legalisation advocates say growing for recreational use should be allowed, too. But it's not clear whether that will happen soon. Mohamed Guerrouj, head of ANRAC, said legalising recreational use would only be considered within a medical framework. 'The goal is to develop Morocco's pharmaceutical industry ... not coffee shops,' he said. — Reuters

Malaysia and Indonesia strengthen ties with key agreements in annual talks
Malaysia and Indonesia strengthen ties with key agreements in annual talks

The Sun

time20 minutes ago

  • The Sun

Malaysia and Indonesia strengthen ties with key agreements in annual talks

JAKARTA: Malaysia and Indonesia solidified their bilateral ties with several key agreements during the 13th Annual Consultation held in Jakarta. Prime Minister Datuk Seri Anwar Ibrahim highlighted the signing of four memorandums of understanding (MoUs) covering border issues, health, information and communication, and internet governance. 'We touched on various important issues including a US$30 billion bilateral trade target, investment cooperation in Ibu Kota Nusantara (IKN), as well as smoother cross-border access facilities in Entikong,' Anwar said at a press conference. He emphasised Malaysia's commitment to being a trustworthy partner in renewable energy, infrastructure, and technology, with Sarawak positioned as an export hub. On maritime boundaries in the Sulawesi Sea, discussions were guided by international law, particularly the UN Convention on the Law of the Sea (UNCLOS). 'Our spirit is to safeguard each other's interests while respecting the boundaries established in accordance with international law,' Anwar explained. Security cooperation was also a focal point, with both nations agreeing to enhance efforts under the Trilateral Cooperative Arrangement (TCA) to maintain peace in the Sulu and Sulawesi Seas. Anwar reiterated Malaysia's strategic focus on the Straits of Malacca and the South China Sea, stressing that regional stability should be determined by regional players. Regarding the case of Indonesian businessman Mohd Riza Chalid, Anwar stated that Malaysia is prepared to cooperate within legal frameworks. 'We have only been informed in general terms and have not received any clear information regarding the matter,' he said. Reports indicate that Chalid, a suspect in a corruption case linked to PT Pertamina, is allegedly in Malaysia.

HKN 2025 Records Over RM1 Mln In Sales
HKN 2025 Records Over RM1 Mln In Sales

Barnama

time38 minutes ago

  • Barnama

HKN 2025 Records Over RM1 Mln In Sales

MELAKA, July 29 (Bernama) -- The National Cooperative Day (HKN) 2025 celebration, held over three days from Friday to Sunday, recorded sales amounting to RM1,099,862.55. The Cooperative Commission of Malaysia (SKM) said the event, themed 'Cooperatives Empowering Communities, Building a MADANI Nation', also recorded potential sales of over RM21 million, reflecting a significant economic impact on the local cooperative ecosystem. It said the celebration drew 58,114 visitors, surpassing the initial target of 50,000, demonstrating strong public support for government initiatives to promote cooperatives through community-focused programmes, particularly for the B40 group.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store