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Market Highlights
Economic Update
Fri, 12 Sep 2025 07:28 am
Malaysia Industrial Production - Steady outlook, but external risks are building

Industrial Production Index (IPI) growth jumped to +4.2% YoY in July (Jun: +2.9%), beating market expectations of +2.8%, supported by stronger manufacturing production and a sharper-than-expected rebound in mining output.

Manufacturing signals remain mixed. While we see the sector outlook holding steady, it remains susceptible to external shocks over the medium term.

Global trade risks continue to cloud the outlook. Reciprocal tariffs, potential semiconductor tariffs, and a firmer ringgit pose downside risks to export competitiveness.

Nonetheless, AI-driven semiconductor demand and resilient household spending should provide some cushion for domestic-oriented manufacturers.
 
We remain cautiously optimistic on the outlook, but risks are building into 2026. We keep our 2025 manufacturing growth forecast at +3.7% and headline GDP at +4.2%.

Economic Update
Thu, 11 Sep 2025 07:14 am
Malaysia Labour Market - Stable conditions supportive of private consumption

Labour market remained resilient in July, with the unemployment rate holding at a decade-low of 3.0%, supported by sustained hiring in services and manufacturing sectors.

We caution against external risks that could pressure firms’ profitability, with knock-on effects on wage growth. That said, manufacturing wages and salaries point to sector resilience at this juncture.

Stable labour market conditions and the minimum wage policy bode well for consumer spending. We forecast steady real private consumption growth of +5.1% YoY in 2025 to cushion against external headwinds.

We remain cautiously optimistic on the domestic outlook and maintain our 2025 GDP growth projection at +4.2% (2024: +5.1%).

Economic Update
Mon, 08 Sep 2025 07:46 am
BNM MPC Meeting - Neutral tone while tariff risks loom

BNM held the OPR at 2.75% in its September MPC meeting, in line with expectations.

Policy tone turned more balanced, noting both downside risks and upside potentials in the global landscape, while projecting inflation to stay moderate into 2026.

We believe the materialization of tariff risks could prompt BNM to reassess risks and adjust its policy path ahead.

We share BNM’s view that domestic demand remains resilient for now, while remaining mindful that sector-specific tariffs could trigger broader growth spillovers.

We see scope for a 25-bp cut in 2026 if tariffs intensify, though BNM’s neutral tone suggests no urgency to ease. We keep our OPR forecast at 2.75% through 2025 and 2026. 

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