Kuala Lumpur: Malaysia's gross domestic product (GDP) is expected to maintain a steady growth rate of five percent in 2025, aligning with the government's target range of 4.5 to 5.5 percent.

According to BERNAMA News Agency, this projection is grounded in the sustained recovery in external demand supported by the global tech upcycle, coupled with robust domestic spending driven by strong investments and resilient consumer spending.

CIMB Securities noted that while the forecast remains optimistic, there are rising downside risks. The potential escalation of trade tensions could increase global inflationary pressures, prompting central banks worldwide to adopt a more cautious approach to rate cuts, thereby potentially dampening growth prospects. The firm also maintained its 2024 GDP growth forecast at 5.2 percent, which is within the government's revised projection of 4.8 to 5.3 percent.

Additionally, CIMB Securities reported that Malaysia's industrial production index (IPI) growth accelerated to 3.6 percent year-on-year in November, up from 2.0 percent in October 2024. This growth was driven by stronger manufacturing output and electricity generation, alongside a slower decline in mining output. Despite a reversal of the slowdown in industrial activity observed in recent months, IPI growth in October and November 2024 still decelerated from the third quarter of 2024, indicating softer industrial activity momentum in the fourth quarter of 2024. The firm suggested that robust performance in the services sector might help offset challenges faced by the manufacturing sector.

The Statistics Department Malaysia is expected to release the fourth quarter 2024 GDP estimates this Friday.