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Friday, May 02, 2025
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Malaysia Revises Growth Outlook Amid US Trade Talks
Country seeks 'fair' deal with US as tariffs impact economy, while reviewing growth projection for 2025
Malaysia is revising its growth outlook due to the impact of tariffs on its economy.
The government is currently reviewing its official growth projection of 4.5% to 5.5% for 2025 after the United States imposed levies earlier this month, creating uncertainty for investment and trade.
Malaysia's Second Finance Minister Amir Hamzah Azizan stated that the country's economic growth slowed down in the first quarter, even before the US announced tariffs on trading partners.
The International Monetary Fund expects the Southeast Asian economy to expand 4.1% this year.Malaysia held trade talks with the US, seeking to avoid a 24% 'reciprocal' tariff from the world's largest economy that's currently on hold for 90 days.
Officials, led by Investment, Trade and Industry Minister Zafrul Aziz, met with US Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer.
Malaysia is open to more talks to narrow the US trade deficit with the country, address non-tariff barriers, and explore a potential bilateral trade agreement.The government is prepared to weather growth hits, with fiscal spending room and increased investment from government-linked firms.
Despite a decline in oil prices, the nation still plans to go ahead with petrol subsidy reforms in mid-2025, with a two-tier system where only the wealthiest 15% in the country pay market rates.
The government is confident of achieving its target to narrow the budget gap to 3.8% of gross domestic product this year, from 4.1% in 2024, as it widens its tax base.Malaysia can also boost regional coordination and trade as global headwinds mount.
Prime Minister Anwar Ibrahim has said that Malaysia will lead efforts to coordinate a regional response by Southeast Asia towards US tariffs.
Malaysia is the current chair of the Association of Southeast Asian Nations or Asean group of 10 countries.
The government is currently reviewing its official growth projection of 4.5% to 5.5% for 2025 after the United States imposed levies earlier this month, creating uncertainty for investment and trade.
Malaysia's Second Finance Minister Amir Hamzah Azizan stated that the country's economic growth slowed down in the first quarter, even before the US announced tariffs on trading partners.
The International Monetary Fund expects the Southeast Asian economy to expand 4.1% this year.Malaysia held trade talks with the US, seeking to avoid a 24% 'reciprocal' tariff from the world's largest economy that's currently on hold for 90 days.
Officials, led by Investment, Trade and Industry Minister Zafrul Aziz, met with US Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer.
Malaysia is open to more talks to narrow the US trade deficit with the country, address non-tariff barriers, and explore a potential bilateral trade agreement.The government is prepared to weather growth hits, with fiscal spending room and increased investment from government-linked firms.
Despite a decline in oil prices, the nation still plans to go ahead with petrol subsidy reforms in mid-2025, with a two-tier system where only the wealthiest 15% in the country pay market rates.
The government is confident of achieving its target to narrow the budget gap to 3.8% of gross domestic product this year, from 4.1% in 2024, as it widens its tax base.Malaysia can also boost regional coordination and trade as global headwinds mount.
Prime Minister Anwar Ibrahim has said that Malaysia will lead efforts to coordinate a regional response by Southeast Asia towards US tariffs.
Malaysia is the current chair of the Association of Southeast Asian Nations or Asean group of 10 countries.
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