MBSB Investment Bank Expects Malaysia’s IPI To Grow Moderately at 2.0 Pct In 2025 

KUALA LUMPUR, Oct 13 (Bernama) -- MBSB Investment Bank Bhd has maintained its projection that Malaysia’s Industrial Production Index (IPI) will moderate to around two per cent this year from 3.7 per cent in 2024, as exports faced slower external demand and higher United States (US) tariffs.

Potential upsides could come from the front-loading activities ahead of the tariff hikes, stronger re-exports, and a sustained rise in domestic demand.

“We expect a sustained rise in domestic spending and local business activities to support the production of domestic-oriented products.

“On the other hand, we remain cautious about the near-term outlook as further tariff hikes and a potentially sharper slowdown in external demand could dampen exports and production activities,” it said in a research note.

According to the Department of Statistics Malaysia (DOSM), Malaysia’s IPI expanded by 4.9 per cent year-on-year in August 2025, supported by the relatively stable performance of the mining sector.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the expansion was driven by the strong growth in the mining sector, which rose 16.8 per cent (July 2025: 4.3 per cent), followed by a 2.8 per cent increase in manufacturing output (July 2025: 4.4 per cent).

Meanwhile, Kenanga Investment Bank Bhd expects growth in the third quarter of 2025 (3Q2025) to reach four per cent, slightly above the previous quarter’s 3.9 per cent, in line with September Manufacturing PMI, which registered 49.8, indicating steady activity.

However, the investment bank said modest expansion is expected in 4Q2025 as slower external demand— largely due to the impact of higher US tariffs — tempers output.

“Domestic demand should continue to support domestic-oriented industries amid sustained local activity. However, downside risks persist from US President Donald Trump’s trade stance and ongoing US-China tensions,” it added.

Kenanga also maintained its 2025 gross domestic product forecast at 4.3 per cent, noting a more cautious 4Q2025 outlook.

“A stronger-than-expected growth in 3Q2025 may provide some upside support to full-year growth,” it said.

-- BERNAMA