Malaysia's Economic Momentum To Be Sustained In 2025 -- HLIB

KUALA LUMPUR, April 2 (Bernama) -- Hong Leong Investment Bank Bhd (HLIB) continues to expect Malaysia’s economic momentum to be sustained in 2025, driven mainly by domestic demand.

Nevertheless, heightened uncertainties surrounding the global trade war and ongoing geopolitical conflicts continue to pose headwinds to the outlook, the investment bank said.

“As we closely monitor global developments, we maintain our 2025 gross domestic product (GDP) forecast at 4.9 per cent year-on-year (y-o-y) and the expectation for Bank Negara Malaysia (BNM) to keep the overnight policy rate (OPR) steady at 3.0 per cent,” it said in a note today.

According to HLIB, monetary indicators softened in February, narrow money supply (M1) and broad money supply slowed to 3.4 per cent (January 2025: 3.8 per cent) and 2.5 per cent (January 2025: 3.3 per cent), respectively, y-o-y. Reserve money also moderated to 4.9 per cent (January 2025: 6.8 per cent) y-o-y.

“In contrast, total leading loan indicators improved amid a pickup in loan applications and a rebound in loan approvals. Loan disbursements continued to decline, but at a softer pace,” it said.

In a separate note, Kenanga Investment Bank Bhd also expected BNM to hold the OPR at 3.0 per cent for the remainder of 2025.

“While external uncertainties may dampen the GDP growth trajectory, we expect the adverse impact to be limited, supported by domestic demand. Meanwhile, inflation is projected to rise to 2.7 per cent due to domestic policy changes.

“Loan growth may face pressure in the near term due to last year’s high base effect, but we expect it to pick up towards year-end, driven by steady domestic economic expansion,” it said.

-- BERNAMA