Maybank IB Shaves GDP Growth Forecast To 4.3 Pct In 2025 Due To US Tariff

KUALA LUMPUR, April 4 (Bernama) -- Maybank Investment Bank Bhd (Maybank IB) has revised Malaysia’s 2025 real gross domestic product (GDP) growth forecasts to 4.3 per cent from 4.9 per cent and to 4.0 per cent from 4.6 per cent for 2026.

This reflects the direct impact of the United States’ (US) reciprocal tariff, even after accounting for exemptions, especially on semiconductor-related products, Malaysia’s key exports to the US, Maybank IB said in a note today.

In 2024, Malaysia accounted for 23.8 per cent of US total integrated circuit imports and 14.6 per cent of semiconductor device imports.

bootstrap slideshow

Maybank IB also said Malaysia’s “negotiate” – not “retaliate” stance – has pre-empted tit-for-tat tariff actions, defusing bigger or even more extreme growth downside.

“At the same time, measures to boost domestic consumer income will be supportive of consumer spending,” it added.

Among the measures taken so far include the civil service pay and pension hikes, minimum wage rise, progressive wage scale-up policy and a larger allocation for lower income groups’ cash handout.

bootstrap slideshow

Maybank IB said investments will face increased uncertainties, particularly trade-related foreign direct investments. The investment diversion under the China+ strategy, which has benefited Malaysia, will also be impacted.

“However, initiatives and incentives for energy transition, economic complexity, the Johor-Singapore Special Economic Zone and domestic investments by government-linked investment companies (GLICs) under the Government-Linked Entities Activation and Reform Programme will provide some buffer,” it said.

Meanwhile, Maybank IB has maintained its inflation forecast of 2.3 per cent and 2.5 per cent for 2025 and 2026, respectively.

It has tweaked its forecast for Bank Negara Malaysia’s overnight policy rate (OPR) from a stable 3.00 per cent to between 2.75 and 3 per cent range for end-2025 and end-2026.

Limited Impact on Malaysia's Domestic-centric Banks 

On a separate note, Maybank IB has maintained its positive outlook for Malaysia's banking sector despite the potential challenges.

Assuming a one per cent cut in loan growth, a 25 basis points drop in the OPR, and a 20 per cent rise in credit costs across the board, its sensitivity analysis suggests a manageable 3 to 7 per cent impact on earnings.

“Dividend yields are expected to remain attractive, ranging from 4 to 6 per cent.

Its preliminary estimates suggest a slower 4.3 per cent GDP growth will lower the industry’s loan growth estimate to 4.7 per cent from 5.5 per cent.

Overweight on Malaysia's Tech Sector 

Meanwhile, Public Investment Bank Bhd (Public IB) said Malaysia’s semiconductors’ exemption from US tariffs “appears to blunt any direct impact on chip production costs”.

“Still, uncertainties persist around potential cost increases for non-semiconductor systems and components sourced from other regional countries,” it said.

“Although the tariff is only imposed on the US importers, we believe the additional costs derived from the reciprocal tariffs would be absorbed by all players in the supply chain including the end customers,” it added.

Malaysia, slapped with a 24 per cent tax, has a cost advantage over regional peers in this manufacturing space.

Public IB said potential retaliation from China could result in more tech-related investments being diverted to Malaysia.

“Nevertheless, Greatech Technology Bhd might be the potential loser under the new US tariff due to its high exposure to the US market while its auto and solar products are unlikely to be exempted under the semiconductor category,” it said.

It is of the view that local electronics manufacturing services (EMS) companies saw a recent surge in sales orders till the third quarter of 2025.

“Sales contribution from the US market is moderate for EMS players like SKP Resources Bhd (20 per cent) and VS Industry Bhd (33 per cent),” the note said.

Global electrical appliance customers have only a few production countries to source from – the Philippines, China and Malaysia – making it less likely to re-route the production chain for tariff savings, it added.

-- BERNAMA