Malaysia can still navigate tariff shocks with investment momentum — Amro
Malaysia can still weather the trade shocks from the US with relative resilience, aided by strong fundamentals, investment momentum, and strategic positioning in the global semiconductor supply chain — even as the broader Asean+3 region is expected to face its weakest growth outlook since the Covid-19 pandemic.
According to the Asean+3 Macroeconomic Research Office’s (AMRO) Regional Economic Outlook 2025 report, while the US tariffs announced on April 2 — which are currently put on hold on most nations except China— tilted to the downside risks, Malaysia’s diversified economic base and moderate exposure to the US market offer some “degree of insulation”.
“Malaysia has been doing very well in attracting investment recently because it has a very strong electronics and semiconductor cluster,” said Amro’s chief economist Hoe Ee Khor during a virtual press conference on Tuesday.
Intel has been there since the 1970s, and more recently, the country has been attracting data centres and cloud infrastructure as it moves up the value chain [by paying Arm Holdings plc US$250 million (RM1.1 billion) over 10 years for semiconductor-related licences and know-how],” he added.
The semiconductor sector — one of the few exempted goods from the US’ new tariffs as of now — is expected to continue supporting Malaysia’s growth trajectory.
Malaysia’s real GDP growth is expected to remain steady in 2025 at 4.7%, a slightly moderated pace amid the global trade headwinds and ease slightly to 4.5% in 2026.
The overall Asean+3 growth is forecast to slow to just above 4% in 2025, from 4.3% in 2024, with the risk of dipping below 4% under the worst-case scenario modelled by the regional research group.
Source: Theedgemalaysia
