IMF Upgrades Malaysia 2025 Growth Forecast Amid Trade Policy Uncertainty

The International Monetary Fund has revised Malaysia’s 2025 GDP growth forecast upward to 4.5% from 4.1%, citing improved prospects for emerging markets despite global trade uncertainties. The 2026 estimate was also raised to 4.0%. Economists attribute the revision to a fluid trade landscape, particularly around U.S. tariff decisions. Bank Muamalat noted that front-loading by U.S. importers in early 2025 may have supported growth, while UOB Kay Hian said some capital expenditure may be postponed due to trade uncertainty. AmBank forecasted a lower 2025 growth rate of 3.8%, below Bank Negara’s 4.0–4.8% range, due to weak exports to China and the EU. However, strong domestic consumption, low inflation, and policy support are expected to sustain momentum. The IMF forecasts a 4.1% expansion for emerging markets in 2025.