Trump 2.0 brings next level challenges in 2025
BIMB Securities Research said fiscal constraints, bureaucratic drag, and global macro headwinds would limit what can be achieved.
PETALING JAYA: Most of Malaysia's economic transformation goals for 2025 will be difficult to achieve, according to a research house.
While political stability and state-federal coordination have improved, BIMB Securities Research said fiscal constraints, bureaucratic drag, and global macro headwinds would limit what can be achieved.
'It must be acknowledged that many targets were set before the pandemic and not adjusted for the dual shocks of Covid-19 and escalating geopolitical tensions reshaping global trade.
'Therefore, not all misses are equal –some 'failures' warrant an asterisk. Furthermore, Trump 2.0 has brought with it some 'next level' challenges,' the research house said.
Its analysis of the 12th Malaysia Plan (12MP) and related national blueprints showed clear progress in some sectors, but others are edging into the 'mission impossible' territory.
Beneath the headline growth, structural imbalances in labour, energy, and food security are building up, according to BIMB Securities Research.
'Our central thesis: policy ambition is high, but execution capacity remains uneven.
'Investors need to stop treating blueprints as guarantees – and instead position tactically around what is working, what is stalling and what the market is mispricing,' it pointed out.
BIMB Securities Research noted that Malaysia's median salary target of RM2,700 for 2025 had been achieved within the first nine months.
While it is a positive progress, factors such as income inequality, sectoral wage gap and rising living costs remain crucial considerations in assessing overall economic well-being.
On the nation's logistics infrastructure, the research house said its ranking in the latest World Bank Logistics Performance Index has dropped to 26th, falling short of the Top 20 target.
'While port efficiency has improved, logistics infrastructure and supply chain performance require further enhancement to meet 12MP objectives,' it said.
As for boosting green mobility, it pointed out that Malaysia has installed 3,611 electric vehicle (EV) charging stations by the end of 2024.
The figure is lower than the 12MP's target of 10,000 EV charging stations this year.
It is also noteworthy that only 30% of the charging stations in 2024 are direct current fast chargers.
Challenges such as high installation costs and grid capacity constraints must be addressed to meet targets this year and ensure nationwide accessibility to EV infrastructure, according to BIMB Securities Research.
The research house also noted that the country's goal to increase the supply of affordable houses is achievable this year.
The 12MP target of affordable houses is 500,000, and as of end-2024, 466,421 houses had been completed, under construction, or are in the planning stages nationwide.
Meanwhile, BIMB Securities Research said Malaysia's target for agrofood production would not be achievable this year.
Rice self-sufficiency ratio (SSR) reduced to 56.2% in 2023, way below than the 12MP target of 75% by 2025.
The increasing reliance on imported rice has led to a declining SSR, the research house pointed out.
It stated that there is an urgent need for stronger policies and investments to boost domestic rice production and enhance food security.
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