KUALA LUMPUR, May 20 — BMI has revised its forecast for Malaysia’s economic growth in 2025 to 4.2 per cent, down from an earlier projection of 5.0 per cent.
The research firm, part of Fitch Solutions, said the slowdown reflected mounting pressure on exports as a result of US tariffs and cooling investment momentum.
The revised figure also falls below the Malaysian government’s target of 4.5 per cent to 5.5 per cent for the year.
Official data released on May 16 showed that GDP grew 4.4 per cent year-on-year in the first quarter, down from 4.9 per cent in the final quarter of 2024.
In its report today, BMI said Malaysia’s export performance will deteriorate in the months ahead, with recent gains unlikely to be sustained.
Exports of electronic and electrical products to the United States spiked in February and March, but the report attributed this to companies rushing orders ahead of new US tariffs.
BMI noted that Malaysia remains highly exposed to the US semiconductor market, which made up nearly 20 per cent of its American-bound exports in 2024.
“We expect this trend to persist over the coming quarters, significantly weakening a tailwind that had propelled Malaysia’s growth in recent years,” the research firm said.
BMI further warned that investment activity, particularly in the construction sector, is losing steam after a strong run in 2024.
Growth in construction work slowed from 23.1 per cent in the final quarter of last year to 16.6 per cent in the first quarter of 2025.
BMI linked the decline to growing investor caution amid global uncertainty and “fickle” policymaking in the United States under President Donald Trump.
With external and investment-driven growth likely to fade, BMI said domestic demand will play an increasingly central role in Malaysia’s economic performance this year.
