<figure id="attachment_3005100" aria-describedby="caption-attachment-3005100" style="width: 1600px" class="wp-caption alignnone"><img loading="lazy" class="size-full wp-image-3005100" src="https://media.freemalaysiatoday.com/wp-content/uploads/2025/03/0848888e-kl-skyline-envato-elements-pic-100325-1.webp" alt="kl skyline" width="1600" height="1000" /><figcaption id="caption-attachment-3005100" class="wp-caption-text">The International Monetary Fund previously put Malaysia&#8217;s real gross domestic product growth forecast for 2025 at 4.7%. (Envato Elements pic)</figcaption></figure>
KUALA LUMPUR: The International Monetary Fund (IMF) has downgraded Malaysia’s real gross domestic product (GDP) growth forecast for 2025 to 4.1% from 4.7% previously, reflecting a broader downward revision across the region.
In its April 2025 World Economic Outlook, titled &#8220;A Critical Juncture Amid Policy Shifts&#8221;, the fund also projected that Malaysia’s economy would expand by 3.8% in 2026.
The IMF trimmed its global growth forecast for 2025 to 2.8%, down 0.5 percentage point from its January estimate.
Regionally, the IMF cut Indonesia’s 2025 outlook to 4.7% from 5.1%.
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The Philippines meanwhile is expected to grow by 5.5%, down from 6.1%, while Thailand’s forecast was revised to 1.8% from 2.9%.
The fund said major policy shifts were reshaping the global trade landscape and reigniting uncertainty, once again testing the resilience of the global economy.
&#8220;Since February, the US has announced multiple waves of tariffs against trading partners, some of which have invoked countermeasures.
&#8220;Markets initially took the announcements mostly in stride, until the US’s near-universal application of tariffs on April 2, which triggered historic drops in major equity indices and spikes in bond yields, followed by a partial recovery after the pause and additional carve-outs announced on and after April 9,&#8221; it said.
The IMF reiterated that the global economy was at a critical juncture, with signs of stabilisation emerging through much of 2024 after a prolonged and challenging period of unprecedented shocks.
&#8220;Inflation, down from multi-decade highs, followed a gradual though bumpy decline towards central bank targets. Labour markets normalised, with unemployment and vacancy rates returning to pre-pandemic levels,&#8221; it added.
On productivity, the IMF noted widening discrepancies as manufacturing activity continued shifting from advanced economies to emerging markets.
Industrial production plunged in all countries at the onset of the pandemic. The recovery paths, however, have been decisively different.
Production soared in China and expanded in smaller European Union economies and the Asean-5 (Indonesia, Malaysia, the Philippines, Singapore, Thailand), whereas it struggled to return to pre-pandemic levels in Japan and the largest EU countries, the IMF said.
The fund said industrial production in the US meanwhile had rebounded more strongly than in other advanced economies.
On commodities, the IMF projected that fuel prices would fall by 7.9% in 2025, led by a 15.5% drop in oil prices and a 15.8% fall in coal prices.
These declines are expected to be partially offset by a 22.8% rise in natural gas prices, driven by colder-than-expected weather and the cessation of Russian gas flows to Europe via Ukraine since January.
Non-fuel commodity prices are forecast to increase by 4.4% in 2025.

MatchPoint Times

IMF cuts M’sia’s 2025 GDP forecast to 4.1%

The International Monetary Fund also projects that Malaysia’s economy will expand by 3.8% in 2026.

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