Latest news with #AhmedRazman
The Sun
10-07-2025
- Business
- The Sun
Malaysia should strengthen Asean ties, engage in multilateral cooperation to counter trade pressures: Experts
KUALA LUMPUR: Malaysia should continue to strengthen its intra-Asean trade relations and engage in multilateral partnerships, as this approach will reduce dependence on any single country and benefit all parties by minimising both trade and non-trade barriers, including tariffs and the movement of goods across borders. Amid an increasingly dynamic geopolitical landscape and rising unilateralism, Malaysia cannot control the actions of other countries that impose tariffs and duties as pressure tactics. However, it can choose to respond diplomatically and in ways that align with its national interests. Economist Dr Nungsari Ahmad Radhi said Malaysia should maintain its current strategy of negotiating with the United States while simultaneously forming alliances and bolstering existing trade relations, especially within Asean. 'We leverage US companies to lobby the US government, since a significant portion of electronics and electrical exports involve intra-firm trade by US companies across borders,' he told Bernama today. However, Nungsari emphasised that Malaysia must consistently support multilateral institutions over the long term. 'We need to do more to integrate Asean economies, even on a bilateral basis if not all at once, such as Malaysia-Singapore. We should deepen cooperation between Malaysia and Thailand, and definitely between Malaysia and Indonesia. 'Achieving free movement of goods between Malaysia and Singapore in the form of a customs union, Malaysia and southern Thailand, Sumatra and Peninsular Malaysia, and Sabah and Sarawak, with Kalimantan, are areas that should be explored and strengthened,' he added. Sharing the same view, Putra Business School Associate Professor Dr Ahmed Razman Abdul Latiff said that as long as there is room for negotiation, Malaysia should seize the opportunity, since some countries, like the Philippines and Vietnam, among others, have successfully reduced tariffs. 'We hope that this time the negotiations will succeed in lowering tariffs, if not eliminating them. We must continue negotiating because it is not impossible to secure exemptions or reductions.' Malaysia has been negotiating with Washington to reduce these tariffs since April, with the latest round of talks held on June 18. Ahmed Razman pointed out that Malaysia cannot rely solely on the outcome of these negotiations. 'We must continue to seek new markets, strengthen the domestic economy, and diversify our industrial products so that if tariffs are imposed on one sector, the impact will not be severe.' Ahmed Razman stressed that Malaysia should boost intra-Asean trade, given the vast untapped potential. 'There is still room to increase trade among Asean countries. Trading within Asean reduces supply chain disruptions and tariff impacts, while also supporting local economies and the Asean economy as a whole,' he explained. Ahmed Razman elaborated that Malaysia's participation in agreements such as the Regional Comprehensive Economic Partnership, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and BRICS would lower costs through tariff elimination among member countries, reduce import duties, and facilitate the movement of goods. 'That is where I see the potential for cooperation with countries that have signed agreements with us,' he added. The US has imposed a 25% tariff on all Malaysian products imported into the country, separate from sector-specific tariffs, effective Aug 1. This rate is one percentage point higher than what was announced in April. In a letter to Prime Minister Datuk Seri Anwar Ibrahim dated July 7, US President Donald Trump stated that 'the 25 per cent number is far less than what is needed to eliminate the trade deficit disparity we have with your country'. However, the letter also noted that no tariffs would apply if Malaysia or Malaysian companies choose to build or manufacture products within the United States, and that Washington 'will do everything possible to get approvals quickly, professionally, and routinely - in other words, in a matter of weeks'. Malaysia has been negotiating these US tariffs with Washington since April, aiming to reduce the earlier 24% tariff, with the most recent discussions held on June 18. Senior lecturer at the School of Economics, Finance and Banking at Universiti Utara Malaysia (UUM), Muhammad Ridhuan Bos Abdullah, said that in the short term, industrial supply chains affected by the new tax will be disrupted as companies absorb the shock. 'A national stabilisation policy is crucial to drive growth by responding effectively to tariff issues, as competition is the main challenge. Bank Negara Malaysia, along with monetary and fiscal policies supported by appropriate instruments, must be more capable of absorbing the impact of US tariffs.' Muhammad Ridhuan said Malaysia's response policies to support competitiveness need to be stronger. 'We must understand that labour costs in the US have been rising steadily, making it an important factor for businesses. 'This trend is driven by factors such as wage increases, higher interest costs, and a competitive labour market. Rising labour costs impact various industries there,' he added. – Bernama
The Sun
22-05-2025
- Business
- The Sun
ASEAN urged to unite on US tariff response
KUALA LUMPUR: The ASEAN bloc should adopt a unified stance when negotiating retaliatory tariffs imposed by the United States (US) to ensure equitable benefits for all member states, said Putra Business School (PBS) MBA Programme Director Associate Professor Dr Ahmed Razman Abdul Latiff. He said Malaysia should take the lead in persuading fellow ASEAN nations to speak with one voice in negotiations over the tariffs introduced during the administration of US President Donald Trump. 'Individually, ASEAN countries lack the economic clout to counter US trade measures, but a united front would represent a formidable regional force,' he said during a special broadcast on the 46th ASEAN Summit aired on Bernama TV on Wednesday. Ahmed Razman said ASEAN needs a consensus-based strategy. 'Imagine a region aiming to strengthen ties with China, but if each country goes it alone, we are simply playing by the US's rules. 'There is a saying, 'united we stand, divided we fall' – and now is the time to make that real. This is something Malaysia, as ASEAN Chair, must fully embrace,' he added. Ahmed Razman also stressed that boosting intra-ASEAN trade must begin with increasing domestic demand across the region, home to about 700 million people. 'Demand stems from consumers' purchasing power. If people cannot afford goods, or demand is weak, trade cannot grow,' he said. Malaysia, as Chair and host of ASEAN 2025, will convene the 46th ASEAN Summit and Related Summits at the Kuala Lumpur Convention Centre from May 26. Two high-level meetings are also scheduled alongside the summit, the 2nd ASEAN-Gulf Cooperation Council (GCC) Summit and the ASEAN-GCC-China Summit, both seen as key platforms for strengthening regional and inter-regional cooperation.
The Sun
22-05-2025
- Business
- The Sun
ASEAN to unite on US tariff response, says economist
KUALA LUMPUR: The ASEAN bloc should adopt a unified stance when negotiating retaliatory tariffs imposed by the United States (US) to ensure equitable benefits for all member states, said Putra Business School (PBS) MBA Programme Director Associate Professor Dr Ahmed Razman Abdul Latiff. He said Malaysia should take the lead in persuading fellow ASEAN nations to speak with one voice in negotiations over the tariffs introduced during the administration of US President Donald Trump. 'Individually, ASEAN countries lack the economic clout to counter US trade measures, but a united front would represent a formidable regional force,' he said during a special broadcast on the 46th ASEAN Summit aired on Bernama TV on Wednesday. Ahmed Razman said ASEAN needs a consensus-based strategy. 'Imagine a region aiming to strengthen ties with China, but if each country goes it alone, we are simply playing by the US's rules. 'There is a saying, 'united we stand, divided we fall' – and now is the time to make that real. This is something Malaysia, as ASEAN Chair, must fully embrace,' he added. Ahmed Razman also stressed that boosting intra-ASEAN trade must begin with increasing domestic demand across the region, home to about 700 million people. 'Demand stems from consumers' purchasing power. If people cannot afford goods, or demand is weak, trade cannot grow,' he said. Malaysia, as Chair and host of ASEAN 2025, will convene the 46th ASEAN Summit and Related Summits at the Kuala Lumpur Convention Centre from May 26. Two high-level meetings are also scheduled alongside the summit, the 2nd ASEAN-Gulf Cooperation Council (GCC) Summit and the ASEAN-GCC-China Summit, both seen as key platforms for strengthening regional and inter-regional cooperation.
New Straits Times
20-05-2025
- Business
- New Straits Times
SRR cut unlocks liquidity, but credit growth tied to confidence
KUALA LUMPUR: Bank Negara Malaysia's surprise move to reduce the statutory reserve requirement (SRR) by 100 basis points effective May 16 is widely seen by economists as a timely liquidity-enhancing measure, with potential implications for credit growth and future monetary policy decisions. The central bank said the move was aimed at bolstering liquidity in the domestic financial system and is estimated to inject approximately RM19 billion into the banking system. Putra Business School economist Professor Dr Ahmed Razman Abdul Latiff said the move could support economic growth in the second half of 2025 by allowing banks to ramp up lending. However, Ahmed Razman cautioned that the overall impact would still hinge on prevailing market sentiment and geopolitical developments. "This injection of liquidity could translate into more active lending by banks, but it ultimately depends on consumer and business confidence, especially in light of global uncertainties and the current overnight policy rate (OPR)," he told the Business Times. Ahmed Razman also noted that the SRR cut could be interpreted as a potential precursor to an OPR cut, though such a sequence is rare. However, he believes the move to reduce the SSR ratio seems unexpected since Bank Negara can also boost liquidity by doing the more direct approach of reducing OPR. "Cutting down SSR ratio to one per cent might lead to little option in the future to support the market growth since cutting down the SSR is always regarded as among the last choices," he said. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the SRR cut would accelerate lending, as funds previously parked under SRR earning zero interest can now be deployed. With the SRR now at one per cent, Afzanizam said banks will have an additional RM19 billion to channel into lending for consumers, including mortgages, personal loans and hire purchase, as well as for businesses. "And not to mention, they also can invest in govt securities and bonds or sukuk that will yield certain returns. All this will help to support domestic demand such as consumption and investment," he said. On whether the SRR reduction is paving the way for an OPR cut, Afzanizam said it remains a possibility, depending on the economic fallout from global tariff shocks. "Monetary policy decisions are highly dynamic, and Bank Negara has a suite of tools at its disposal. On that note, the OPR decision will be deployed in a timely fashion, depending on the severity of the impact from the tariff shock," he said. In a recent report, Moody's Analytics economist Sunny Nguyen said the SRR cut gives Bank Negara crucial breathing room to evaluate several moving parts in the global economic environment. These include the impact of US-led trade tariffs, the trajectory of inflation, and the policy direction of the US Federal Reserve (Fed). "A lower SRR allows banks to lend more, boosting economic growth by increasing credit availability. Liquidity injections are the policy equivalent of loosening your tie in case you decide to change shirts," she said. Nguyen noted that in the past, namely in 2009, 2016 and 2020, the central bank's playbook when markets were jumpy and the ringgit was on the defensive opened with an SRR cut. Once data confirmed an economic slowdown and inflation was no longer a concern, it followed with rate cuts. "Will that pattern repeat? The odds favour a 25‐basis point rate cut to 2.75 per cent in September, so long as the headline CPI stays convincingly below 3 per cent year on year. "And the Fed must resume its easing cycle, something futures markets are tentatively signalling will happen in September," she said. Nguyen expects Bank Negara to maintain the OPR at 3.00 per cent until at least August. However, she anticipates a 25 basis point cut to 2.75 per cent in September, provided inflationary pressures ease and the Fed begins its own rate-lowering cycle. Economist Dr Geoffrey Williams said while the SRR cut frees up more liquidity for lending, actual credit expansion depends on demand from businesses and consumers. "If businesses and consumers are willing to take loans, the RM19 billion becomes an effective stimulus. But if demand is weak, banks will simply hold the funds. "This move keeps commercial interest rates more stable and aligned with the OPR, helping ensure that the cost of borrowing does not rise unnecessarily," he said. In addition, Williams also highlighted that Bank Negara's use of the SRR reflects a prudential approach to monetary management, rather than immediately adjusting the OPR. "At the moment inflationary pressures are moderate, growth is strong and banks are well capitalised so there is no need for a cut in the OPR. "So it is a good move given uncertainty in the global market and avoids changing the OPR and monetary policy stance which are in good shape. "Overall, I think it is a signal of prudential management rather than a signal of a likely change in policy," he added.
New Straits Times
17-05-2025
- Business
- New Straits Times
Growth momentum expected to soften this year
KUALA LUMPUR: Malaysia continues to show resilience with a solid economic outturn, despite gross domestic product (GDP) growth moderating to 4.4 per cent in the first quarter (Q1) of 2025 from 4.9 per cent in the previous quarter, economists said. The latest Q1 GDP data provides crucial insights into early 2025 developments and offers a glimpse into the country's growth trajectory for the remainder of the year amid trade tensions and geo-political uncertainties, they added. "While the 4.4 per cent growth outpaces the 4.2 per cent recorded in Q1 2024, it marks the lowest quarterly expansion in the past three quarters, indicating a softening trend amid a challenging global backdrop. "This is expected as this year faced many global uncertainties in geopolitical and conflict crises, notwithstanding climate and supply chain crises," Putra Business School economic analyst Prof Dr Ahmed Razman Abdul told the Business Times. Nevertheless, Ahmed Razman said fear of reciprocal tariff had led to surge of demand from the US importers in the first quarter of the year. "For the remaining quarters of the year, it is expected that the growth remains positive but moderate as the World Bank has also revised the Malaysian 2025 growth to 3.9 per cent," he said. Echoing the views, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the moderation was expected, but the underlying fundamentals remain intact. Afzanizam noted that the country's dual growth engines (domestic demand and net exports) remained positive, expanding by 6.0 per cent and 19.6 per cent respectively, although at a slower pace compared to the final quarter of 2024. "Bank Negara Malaysia has explicitly mentioned the external condition is going to be very challenging which warrants a review in the current GDP forecast of 4.5 to 5.5 per cent for 2025. "I think it makes sense for them to wait as the negotiations are still ongoing with the US and the recent concession between the US and China indicates that the intensity of the tariff shocks would be manageable. "Having said that, the authorities remain vigilant about the external risks and have been responding appropriately," he said. In addition, economist Dr Geoffrey Williams said the latest Q1 2025 data shows strong performance given uncertainties and lays a good foundation for the rest of the year. He noted that there was a stronger-than-expected 6.8 per cent annual rise in exports in March, when shipments to the United States rose 50.8 per cent to a record RM22.66 billion (US$5.14 billion). "The tariff issues are under negotiation and we expect them to be resolved following the example of the UK and China. This will mean that the outlook for the second half of the year will be better if there is a good negotiation outcome," he said. Earlier today, Bank Negara announced that Malaysia's economy expanded by 4.4 per cent in the first quarter of 2025, underpinned by resilient consumer spending and sustained growth in investment. The latest growth figure reflects a slight slowdown from the five per cent expansion registered in the fourth quarter of 2024. On headline inflation, Bank Negara said it had moderated to 1.5 per cent in Q1 2025 from 1.8 per cent in Q4 2024. The moderation was largely due to lower utilities inflation at 3.0 per cent from 18.1 per cent in Q4 2024. Core inflation, however, edged higher to 1.9 per cent from 1.7 per cent in Q4 2024, driven mainly by rental inflation, which rose to 2.1 per cent, it added.
