Malaysia's IPI to grow moderately at 2.0% in 2025
KUALA LUMPUR: Malaysia's Industrial Production Index (IPI), which expanded at a slower pace of 2.7 per cent year-on-year (y-o-y) in April, is expected to grow moderately at 2.0 per cent in 2025, according to MIDF Amanah Investment Bank Bhd.
The investment bank said it is maintaining its forecast for the IPI to moderate to 2.0 per cent after the Department of Statistics Malaysia (DOSM) announced today that the index rose by 2.4 per cent y-o-y in the first four months of this year (Jan-April 2024: 3.6 per cent).
According to DOSM, the IPI recorded a growth of 3.8 per cent in 2024.
'Following continued uncertainties from higher tariffs and intensified trade tensions, production of export-oriented products, particularly manufactured goods, will be adversely impacted by weaker external demand and slower global manufacturing activities.
'Nevertheless, the frontloading and a temporary boost to trade activities could still support these vulnerable sectors which are exposed to the external slowdown,' MIDF Amanah said in a note.
It said that although there could be short-term support following the United States' decision to pause the implementation of reciprocal tariffs, encouraging progress from the ongoing trade talks will be crucial to reduce the adverse impacts of trade tensions on future demand outlook and production activities.
'Nevertheless, we maintain positive growth (forecast) for the IPI for now as we expect production, especially in the domestic-oriented sectors, to continue growing on the back of expanding domestic demand,' it added.
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