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Barnama
7 hours ago
- Business
- Barnama
Analysts See Malaysia's Inflation Rate At Between Two And 2.2 Pct In 2025
BUSINESS KUALA LUMPUR, July 22 (Bernama) -- Malaysia's inflation for 2025 is projected at 2.0 per cent, supported by the 'gradual and orderly implementation of fiscal retargeting measures and moderate demand-side pressures,' said RHB Investment Bank Bhd (RHB IB). The investment bank noted that while domestic policy action, such as retargeting of the RON95 subsidy, Sales and Service Tax (SST) expansion, wage-related adjustments and the restructuring of electricity tariffs, may exert some upward pressure on prices, the overall impact is expected to remain contained. "Inflation averaged a soft 1.4 per cent in the first half of 2025 (1H 2025) and is projected to rise to 2.4 per cent to 2.5 per cent in the second half of 2025 (2H 2025), reflecting potential upside risks from the domestic policy action factors. "However, we also see downside risks to our current inflation projections, particularly due to possible delays in the implementation of the RON95 subsidy retargeting," it said in a research note today. RHB IB estimated the direct impact of the SST expansion on the consumer price index (CPI) to be negligible at around 0.1-0.2 per cent year-on-year (y-o-y) on a full-year basis. "Nonetheless, we expect some passthrough impact from SST broadening to higher food prices and increased business costs to consumers, albeit in a limited fashion," it said. The bank also expects the overnight policy rate (OPR) to remain at 2.75 per cent for the remainder of 2025, provided gross domestic product (GDP) growth remains within the long-term range of four to five per cent. "Inflationary pressures to remain manageable. For upcoming meetings in September and November, officials will likely stay data-dependent," it said. Meanwhile, CIMB Investment Bank Bhd projects the annual CPI at 2.2 per cent in 2025, supported by the relatively limited impact of recent policy adjustments. "We flag the November monetary policy committee (MPC) meeting as a key event to watch, given two critical developments, namely the tabling of Budget 2026 on Oct 10 and the availability of more meaningful macro-data points. This includes external trade figures for August and September post frontloading activity, as well as advance 3Q 2025 GDP estimates," it said. Against this backdrop, CIMB Investment expects the OPR to stay at 2.75 per cent through end-2025.
New Straits Times
7 hours ago
- Business
- New Straits Times
Analysts see Malaysia's inflation rate at between two and 2.2pct in 2025
KUALA LUMPUR: Malaysia's inflation for 2025 is projected at 2.0 per cent, supported by the "gradual and orderly implementation of fiscal retargeting measures and moderate demand-side pressures," said RHB Investment Bank Bhd (RHB IB). The investment bank noted that while domestic policy action, such as retargeting of the RON95 subsidy, Sales and Service Tax (SST) expansion, wage-related adjustments and the restructuring of electricity tariffs, may exert some upward pressure on prices, the overall impact is expected to remain contained. "Inflation averaged a soft 1.4 per cent in the first half of 2025 (1H 2025) and is projected to rise to 2.4 per cent to 2.5 per cent in the second half of 2025 (2H 2025), reflecting potential upside risks from the domestic policy action factors. "However, we also see downside risks to our current inflation projections, particularly due to possible delays in the implementation of the RON95 subsidy retargeting," it said in a research note today. RHB IB estimated the direct impact of the SST expansion on the consumer price index (CPI) to be negligible at around 0.1-0.2 per cent year-on-year (y-o-y) on a full-year basis. "Nonetheless, we expect some passthrough impact from SST broadening to higher food prices and increased business costs to consumers, albeit in a limited fashion," it said. The bank also expects the overnight policy rate (OPR) to remain at 2.75 per cent for the remainder of 2025, provided gross domestic product (GDP) growth remains within the long-term range of four to five per cent. "Inflationary pressures to remain manageable. For upcoming meetings in September and November, officials will likely stay data-dependent," it said. Meanwhile, CIMB Investment Bank Bhd projects the annual CPI at 2.2 per cent in 2025, supported by the relatively limited impact of recent policy adjustments. "We flag the November monetary policy committee (MPC) meeting as a key event to watch, given two critical developments, namely the tabling of Budget 2026 on Oct 10 and the availability of more meaningful macro-data points. This includes external trade figures for August and September post frontloading activity, as well as advance 3Q 2025 GDP estimates," it said. Against this backdrop, CIMB Investment expects the OPR to stay at 2.75 per cent through end-2025.
The Star
5 days ago
- Business
- The Star
MRT3 developments boosts construction sector outlook, contract awards expected by 2027
KUALA LUMPUR: Investment banks remain optimistic about the construction sector following more clarity and the latest developments involving the Mass Rapid Transit 3 (MRT3) project. In a note today, RHB Investment Bank Bhd (RHB IB) said it expects details to be announced during the upcoming tabling of the 13th Malaysia Plan on July 31, 2025 or Budget 2026 on October 10, including the funding mechanism, latest estimated cost and whether a fresh round of re-tendering is required. "Recall that in the revised Budget 2023, tabled in February 2023, the government announced its intention to review the cost of the MRT3 project in the hope of reducing the total amount to below RM45 billion from the estimated RM68 billion in 2018. "We envisage MRT3 contract awards and construction to likely commence in 2027,' it added. It has maintained an "Overweight' call on the sector. Separately, MBSB Investment Bank Bhd (MBSB IB) expects a re-tender exercise to be called by mid-2026, with contracts to be awarded between the end of 2026 and the middle of 2027, towards the end of the land acquisition exercise. MRT Corp sought four extensions for the project's tender validity. No extensions were sought after the last one in March 2024. This means the tenders would have naturally lapsed, MBSB IB said. "We believe there would also be some changes to the project's original alignment and the placement of stations, considering the reduction in plots of land for acquisition. "Construction of the MRT3 may begin in 2027. This will keep contractors busy up to 2033. This will be a timely continuation of projects following the expected completion of the Johor-Singapore Rapid Transit System and the East Coast Rail Link by the end of 2026,' MBSB IB said. It is maintaining a "Positive' recommendation on the sector. The MRT3 Circle Line is a 51 km orbital alignment to serve the perimeters of Kuala Lumpur. The alignment is expected to be 39 km elevated and 12 km underground, with 22 elevated stations, seven underground and three future stations.- Bernama
Malaysian Reserve
5 days ago
- Business
- Malaysian Reserve
MRT3 development boosts construction sector outlook, contract awards expected by 2027
INVESTMENT banks remain optimistic about the construction sector following more clarity and the latest developments involving the Mass Rapid Transit 3 (MRT3) project. In a note today, RHB Investment Bank Bhd (RHB IB) said it expects details to be announced during the upcoming tabling of the 13th Malaysia Plan on July 31, 2025 or Budget 2026 on October 10, including the funding mechanism, latest estimated cost and whether a fresh round of re-tendering is required. 'Recall that in the revised Budget 2023, tabled in February 2023, the government announced its intention to review the cost of the MRT3 project in the hope of reducing the total amount to below RM45 billion from the estimated RM68 billion in 2018. 'We envisage MRT3 contract awards and construction to likely commence in 2027,' it added. It has maintained an 'Overweight' call on the sector. Separately, MBSB Investment Bank Bhd (MBSB IB) expects a re-tender exercise to be called by mid-2026, with contracts to be awarded between the end of 2026 and the middle of 2027, towards the end of the land acquisition exercise. MRT Corp sought four extensions for the project's tender validity. No extensions were sought after the last one in March 2024. This means the tenders would have naturally lapsed, MBSB IB said. 'We believe there would also be some changes to the project's original alignment and the placement of stations, considering the reduction in plots of land for acquisition. 'Construction of the MRT3 may begin in 2027. This will keep contractors busy up to 2033. This will be a timely continuation of projects following the expected completion of the Johor-Singapore Rapid Transit System and the East Coast Rail Link by the end of 2026,' MBSB IB said. It is maintaining a 'Positive' recommendation on the sector. The MRT3 Circle Line is a 51 km orbital alignment to serve the perimeters of Kuala Lumpur. The alignment is expected to be 39 km elevated and 12 km underground, with 22 elevated stations, seven underground and three future stations. — BERNAMA
Barnama
7 days ago
- Business
- Barnama
Rubber Products Outlook Remains Gloomy On Unfavourable Operating Environment
BUSINESS KUALA LUMPUR, July 16 (Bernama) -- RHB Investment Bank Bhd (RHB IB) expects the rubber products sector to remain bleak due to an unfavourable operating environment driven by a longer-than-expected period of inventory consolidation. In a research note today, the bank said competition remains intense in non-United States (US) markets, largely due to the hostile pricing strategy adopted by Chinese manufacturers. 'Persistent challenges in cost pass-through, coupled with a rising operating cost environment and a weaker US dollar, are expected to weigh on glove makers' profitability moving forward. "Other downside risks include the deteriorating US-China relationship, rising glove average selling prices (ASPs), faster-than-expected capacity expansion, and lower-than-expected raw material prices,' it said. Meanwhile, the bank also anticipates that the commissioning of new plants in Indonesia and Vietnam could pose a threat to Malaysia's rubber product exports to the US by as early as November 2025. According to the Department of Statistics Malaysia, the country's glove exports recorded month-on-month declines of 22 per cent and six per cent in April and May. This suggests that customer restocking activities remain sluggish, as the industry continues to experience a longer-than-expected gestation period following the front-loading seen in the fourth quarter of 2024. The continued weakness of the US dollar against the ringgit has further eroded glove makers' profitability, with the greenback depreciating by three per cent quarter-on-quarter and 5.4 per cent year-to-date as of June. 'Therefore, we maintained our 'underweight' call on the sector,' it added.
