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New Straits Times
01-07-2025
- Business
- New Straits Times
Malaysia is accelerating economic transformation : Amir Hamzah
KUALA LUMPUR: Malaysia is accelerating its economic transformation through regional collaboration, fiscal reform, and sustainable industrialisation, positioning itself as a central force in Asean's growth, Finance Minister II Datuk Seri Amir Hamzah Azizan said during the Invest Asean Malaysia Conference 2025. Amir Hamzah emphasised Asean's collective economic strength, with a GDP of US$ 4 trillion and a population of 700 million and highlighted Malaysia's robust regional integration, with Asean accounting for 26.6 per cent of Malaysia's trade and over 10 million tourist arrivals in the first quarter of 2025 (Q1 2025), two-thirds from neighbouring Asean nations. A key focal point is the Johor-Singapore Special Economic Zone (JS-SEZ), which has emerged as a magnet for investments. Amir Hamzah revealed that JS-SEZ has secured RM16.7 billion in committed investments since its launch in January, with a government target of RM100 billion by year-end. "The Forest City Special Financial Zone within the JS-SEZ is particularly promising," said Amir Hamzah, citing its 20-year 0 per cent tax structure and the zone has drawn interest from 32 firms, with two already receiving regulatory approval to establish family offices. Malaysia's economic outlook remains resilient, with GDP growth for 2025 projected at 4.5 to 5.5 per cent, while the country's Q1 2025 growth of 4.4 per cent year-on-year was driven by private consumption, investments, and the services and manufacturing sectors, which helped offset moderating trade. On fiscal reform, Amir Hamzah reaffirmed the government's commitment to fiscal consolidation, targeting a deficit reduction to 3.8 per cent of GDP in 2025, down from 4.1 per cent in 2024. Measures such as subsidy rationalisation for RON95 petrol and the expansion of the Sales and Services Tax aim to broaden Malaysia's revenue base, enabling continued investments in infrastructure, talent development, and innovation. In the industrial and energy sectors, Amir Hamzah spotlighted three national strategies shaping Malaysia's future, including the National Industrial Master Plan 2030, which has attracted RM95 billion in investment over seven years, while the National Semiconductor Strategy secured RM55.8 billion in electrical and electronics investments in 2024. Additionally, the National Energy Transition Roadmap aims for renewable energy capacity of 70 per cent by 2050, supported by flagship projects like hybrid hydro-floating solar initiatives. Malaysia is also positioning itself as a green energy transit hub in Asean by spearheading the regional renewable energy grid, with the first phase involving exporting renewable energy from Vietnam to Singapore through Malaysia's grid, laying the groundwork for a scalable cross-border energy collaboration model. Further aligning with Asean's ESG and carbon neutrality goals, Malaysia has launched sustainability initiatives through Bursa Malaysia, including the Centralised Sustainability Intelligence platform to enhance transparency and the Bursa Carbon Exchange to support high-quality carbon projects across the region. Looking ahead, the upcoming Budget 2026 and the 13th Malaysia Plan will continue Malaysia's trajectory of reform, inclusivity, and resilience. "During times of great volatility, the opportunities are most apparent," Amir Hamzah concluded. "Malaysia and Asean stand ready to embrace them together."
BusinessToday
16-05-2025
- Business
- BusinessToday
OCBC Revises Malaysia's Monetary Policy Forecast
Malaysia's economy expanded by 4.4% year-on-year in the first quarter of 2025, matching advance estimates, but signs of a broader slowdown have prompted OCBC Bank to revise its monetary policy forecast, bringing forward expectations of Bank Negara Malaysia (BNM) rate cuts to the second half of this year. According to OCBC Malaysia's Senior ASEAN Economist Lavanya Venkateswaran, the unchanged GDP print—down from 4.9% in Q4 2024—masks underlying weakness in domestic demand and exports, both of which are expected to weigh on growth in the coming quarters. 'The final Q1 GDP figure reflects softening domestic consumption and investments, coupled with slower goods exports,' OCBC noted in its latest economic update. 'Given the rising external risks, particularly from US trade tariffs, we now expect BNM to cut its policy rate by a total of 50 basis points in 2H25, earlier than our previous forecast of 1H26″ she said. Domestic Demand and Exports Show Signs of Fatigue OCBC noted that the domestic final demand contributed 5.7 percentage points (pp) to GDP growth in Q1 2025, down from 6.0pp in Q4 2024. Household consumption growth moderated to 5.0%, while investment activity cooled to 9.7% from 11.8% in the previous quarter. Public sector spending remained stable, while government expenditure edged slightly higher to 4.3% from 4.0%. Net exports added just 0.8pp to GDP growth, a sharp drop from 2.0pp in Q4 2024. Goods exports grew by only 1.6% year-on-year, while services exports held up relatively well, rising 16.9% amid continued strength in tourism inflows. However, the Bank said inventory drawdowns continued to drag on growth, subtracting 2.2pp from headline GDP—a fifth consecutive quarter of negative contribution from inventories. Sectoral Trends and External Balances On the supply side, downward revisions were made to growth in the manufacturing, construction, and services sectors, although the construction and services sectors remained relatively resilient. The contraction in the mining and quarrying sector was revised to -2.7% from an earlier estimate of -4.9%. Malaysia's current account surplus widened to RM16.7 billion (3.4% of GDP) in Q1 2025, up from RM12.9 billion in Q4, supported by a stronger goods trade surplus and a smaller secondary income deficit. However, the capital and financial account posted a wider deficit of RM20.2 billion, led by increased portfolio outflows and a slight decline in FDI inflows. Growth Outlook Dampened by Global Uncertainty OCBC projects Malaysia's GDP growth to slow further to 4.3% in 2025, down from 5.1% in 2024. Key downside risks include the imposition of US tariffs on Malaysian exports—particularly in sectors like semiconductors and pharmaceuticals—as well as a broader cooling in household and corporate spending due to growing global uncertainty. The bank expects Malaysia's current account surplus to narrow slightly to 1.7% of GDP in 2025, from 1.4% last year. 'With businesses adopting a wait-and-see approach and households turning cautious, economic momentum could ease further,' OCBC said. 'This makes the case for a more accommodative monetary policy.' BNM Signals Readiness to Act At its latest meeting on 8 May, BNM adopted a more dovish tone, citing increased downside risks to the economy. The central bank also reduced the Statutory Reserve Requirement (SRR) from 2% to 1%, effective 16 May, injecting RM19 billion in liquidity into the system. BNM Governor Tan Sri Abdul Rasheed Ghaffour commented that the central bank 'has the policy space to act if needed,' signaling readiness to support the economy if conditions deteriorate. OCBC believes that the upcoming BNM meetings—scheduled for 9 July, 4 September, and 6 November—will be closely watched for signs of a rate cut, depending on incoming economic data and the outcome of US-Malaysia trade negotiations. Related
The Star
16-05-2025
- Business
- The Star
Malaysia posts RM16.7bil surplus in current account balance in 1Q 2025
KUALA LUMPUR: Malaysia's current account balance (CAB) recorded a RM16.7 billion surplus in the first quarter of 2025 (1Q 2025), equivalent to 3.4 per cent of the gross domestic product (GDP), supported by net exports of goods and a smaller deficit in the secondary income account, said Statistics Department Malaysia (DOSM). In a statement, chief statistician Datuk Seri Mohd Uzir Mahidin said the improvement was driven by net exports of goods, which amounted to RM38.5 billion. "Exports of goods reached RM283.2 billion, a 4.0 per cent decrease compared to the previous quarter. Malaysia's leading export items include electrical and electronics; petroleum products; and machinery, equipment and parts, with Singapore, the United States (US) and China being the top trading partners," he said. Mohd Uzir said imports of goods declined by 5.2 per cent quarter-on-quarter to RM244.7 billion, primarily reflecting lower imports of intermediate goods, capital goods and consumption goods, with key sources of imports being China, Singapore and Taiwan. DOSM said the higher CAB was due to a smaller deficit in the secondary income account of RM1.2 billion in 1Q 2025 against RM5.9 billion in the preceding quarter, driven by higher settlement receipts from abroad. DOSM said the financial account registered a RM20.3 billion net outflow versus RM9.3 billion in the last quarter, driven by a significant increase in portfolio investment. There was a RM48.3 billion net outflow compared with RM42.0 billion in the previous quarter, contributed by resident subscription of foreign equity securities. According to DOSM, foreign direct investment recorded a net inflow of RM15.6 billion in 1Q 2025 against RM18.7 billion in 4Q 2024 due to lower investment in debt instruments. It said FDI inflows were mostly channelled to the services sector, largely within financial activities and information and communication subsectors related to data centre activities; major FDI investors were from Singapore, Hong Kong and Germany. At the same time, direct investment abroad (DIA) registered a lower RM3.5 billion net outflow versus RM5.2 billion in 4Q 2024. "The outflows were principally in the form of equity and investment fund shares, mainly directed towards the services sector, with the majority concentrated in financial activities. Indonesia, Brunei and Thailand were DIA main destinations during the quarter,' DOSM said. At the end of 1Q 2025, its international investment position amounted to RM37.8 billion in net assets, and its international reserves at RM520.7 billion as at end-March 2025. - Bernama
The Sun
16-05-2025
- Business
- The Sun
Malaysia posts RM16.7b surplus in current account balance in 1Q 2025
KUALA LUMPUR: Malaysia's current account balance (CAB) recorded a RM16.7 billion surplus in the first quarter of 2025 (1Q 2025), equivalent to 3.4 per cent of the gross domestic product (GDP), supported by net exports of goods and a smaller deficit in the secondary income account, said Statistics Department Malaysia (DOSM). In a statement, chief statistician Datuk Seri Mohd Uzir Mahidin said the improvement was driven by net exports of goods, which amounted to RM38.5 billion. 'Exports of goods reached RM283.2 billion, a 4.0 per cent decrease compared to the previous quarter. Malaysia's leading export items include electrical and electronics; petroleum products; and machinery, equipment and parts, with Singapore, the United States (US) and China being the top trading partners,' he said. Mohd Uzir said imports of goods declined by 5.2 per cent quarter-on-quarter to RM244.7 billion, primarily reflecting lower imports of intermediate goods, capital goods and consumption goods, with key sources of imports being China, Singapore and Taiwan. DOSM said the higher CAB was due to a smaller deficit in the secondary income account of RM1.2 billion in 1Q 2025 against RM5.9 billion in the preceding quarter, driven by higher settlement receipts from abroad. DOSM said the financial account registered a RM20.3 billion net outflow versus RM9.3 billion in the last quarter, driven by a significant increase in portfolio investment. There was a RM48.3 billion net outflow compared with RM42.0 billion in the previous quarter, contributed by resident subscription of foreign equity securities. According to DOSM, foreign direct investment recorded a net inflow of RM15.6 billion in 1Q 2025 against RM18.7 billion in 4Q 2024 due to lower investment in debt instruments. It said FDI inflows were mostly channelled to the services sector, largely within financial activities and information and communication subsectors related to data centre activities; major FDI investors were from Singapore, Hong Kong and Germany. At the same time, direct investment abroad (DIA) registered a lower RM3.5 billion net outflow versus RM5.2 billion in 4Q 2024. 'The outflows were principally in the form of equity and investment fund shares, mainly directed towards the services sector, with the majority concentrated in financial activities. Indonesia, Brunei and Thailand were DIA main destinations during the quarter,' DOSM said. At the end of 1Q 2025, its international investment position amounted to RM37.8 billion in net assets, and its international reserves at RM520.7 billion as at end-March 2025.
The Sun
16-05-2025
- Business
- The Sun
Malaysia posts RM16.7b surplus in current account balance
KUALA LUMPUR: Malaysia's current account balance (CAB) recorded a RM16.7 billion surplus in the first quarter of 2025 (1Q 2025), equivalent to 3.4 per cent of the gross domestic product (GDP), supported by net exports of goods and a smaller deficit in the secondary income account, said Statistics Department Malaysia (DOSM). In a statement, chief statistician Datuk Seri Mohd Uzir Mahidin said the improvement was driven by net exports of goods, which amounted to RM38.5 billion. 'Exports of goods reached RM283.2 billion, a 4.0 per cent decrease compared to the previous quarter. Malaysia's leading export items include electrical and electronics; petroleum products; and machinery, equipment and parts, with Singapore, the United States (US) and China being the top trading partners,' he said. Mohd Uzir said imports of goods declined by 5.2 per cent quarter-on-quarter to RM244.7 billion, primarily reflecting lower imports of intermediate goods, capital goods and consumption goods, with key sources of imports being China, Singapore and Taiwan. DOSM said the higher CAB was due to a smaller deficit in the secondary income account of RM1.2 billion in 1Q 2025 against RM5.9 billion in the preceding quarter, driven by higher settlement receipts from abroad. DOSM said the financial account registered a RM20.3 billion net outflow versus RM9.3 billion in the last quarter, driven by a significant increase in portfolio investment. There was a RM48.3 billion net outflow compared with RM42.0 billion in the previous quarter, contributed by resident subscription of foreign equity securities. According to DOSM, foreign direct investment recorded a net inflow of RM15.6 billion in 1Q 2025 against RM18.7 billion in 4Q 2024 due to lower investment in debt instruments. It said FDI inflows were mostly channelled to the services sector, largely within financial activities and information and communication subsectors related to data centre activities; major FDI investors were from Singapore, Hong Kong and Germany. At the same time, direct investment abroad (DIA) registered a lower RM3.5 billion net outflow versus RM5.2 billion in 4Q 2024. 'The outflows were principally in the form of equity and investment fund shares, mainly directed towards the services sector, with the majority concentrated in financial activities. Indonesia, Brunei and Thailand were DIA main destinations during the quarter,' DOSM said. At the end of 1Q 2025, its international investment position amounted to RM37.8 billion in net assets, and its international reserves at RM520.7 billion as at end-March 2025.
