RHB Investment Bank Maintains Malaysia 2025 GDP Forecast At 5.0 Pct Post-Trump Win

KUALA LUMPUR, Nov 6 (Bernama) -- RHB Investment Bank Bhd has maintained Malaysia’s 2025 gross domestic product (GDP) growth forecast at 5.0 per cent based on global assumptions for a Goldilocks backdrop following Donald Trump’s victory in the United States (US) presidential elections.

In a note today, the investment bank said Trump's return to the White House may continue supporting US-centric growth amid potential de-escalating geopolitical tensions.

“On the flip side, we remain concerned over short-term volatility, albeit we think the ongoing resiliency of global growth fundamentals will persist into 2025.

bootstrap slideshow

“We remain positive about Malaysia's growth in 2025; we see little direct negative impact on Malaysia's trade prognosis, with tariff effects to be limited, thus translating into a downplay in inflation risks,” it said. 

Separately, RHB Investment Bank said Malaysia's inflation will likely average 2.7 per cent in 2025. Price trajectory will likely be a function of domestic policies, including RON95 rationalisation and higher minimum wages, while higher civil services remuneration may feed into stronger demand-pull price pressures.

“We see several key possible impacts on Malaysia's economy on a projected Trump victory,” it added. 

bootstrap slideshow

On trade disruptions and shifts in the supply chain, it expects limited direct impact on Malaysia's export-oriented sector vis-a-vis US protectionist policies under Trump. However, the knock-on effects via China could be substantial.

“As a key supplier within China-centric supply chains, Malaysia may experience greater negative impacts from indirect channels as Chinese goods are likely to face US tariffs.

“There will be a knock-on effect on Malaysia's exports, especially for electrical and electronics (E&E) sector components (which are) integrated into China's manufacturing processes,” it said.

 RHB Investment Bank said Malaysia may look to strengthen ties with other economic blocs to diversify trade exposure, such as the Regional Comprehensive Economic Partnership (RCEP), BRICS, and ASEAN.

“These partnerships could help Malaysia build stronger trade ties within Asia, partly offsetting potential losses in US market access,” it added. 

Meanwhile, MIDF Amanah Investment Bank Bhd does not expect the US presidential election to impact the global oil and gas industry. 

It believed that a balanced approach to conventional fuel production and renewables would be favourable for oil prices to remain elevated.

However, it said OPEC+ remains a major decision-maker in rebalancing a lower crude oil price, should the US choose to raise its production.

“We opine that an integrated company would benefit from either presidential candidate while weathering the downside risks of the volatile oil movement,” it said.

Meanwhile, global research and energy intelligence company Rystad Energy said oil prices have yet to show significant movement following Trump’s win.

Its global head of commodity markets (oil) Mukesh Sahdev said oil prices remain under pressure from ongoing supply chain disruptions and a sluggish macroeconomic recovery as the market navigates shifting political and geopolitical hurdles.

“Adding to the complexity, the strengthening dollar, boosted by Trump’s return to office, leaves oil market participants grappling with election-related uncertainties that can only be answered in the coming months.

“Following Trump's impending return to the White House, oil market participants are eagerly anticipating what lies ahead,” he said.

He said that the US political system is at a crossroads, with Trump's potential second term set to either drive significant changes in US policy or reinforce existing policies; both outcomes carry major implications for global oil markets in 2025.

“Regardless of geopolitical uncertainties and the recent election outcome, persistent trends in oil markets are likely to shape the outlook ahead,” he said.

-- BERNAMA