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Malaysian Central Bank Sets Overnight Policy Rate at 2.75%

Bursa Malaysia Berhad Sees 17.9% Drop in Profit for FY2025 and Announces Dividend

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Malaysia aims for a 7% share of the global advanced semiconductor packaging market by 2035, supported by a MYR 92 million R&D grant for a consortium of five local companies. The initiative, part of the National Semiconductor Strategy, focuses on enhancing the industry’s value chain, moving from traditional assembly to advanced packaging, driven by AI and high-performance computing demand. Malaysia, currently the sixth-largest semiconductor exporter, seeks to avoid low-margin traps and develop local talent, while strengthening industry-academia collaboration.

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Malaysia eyes 7 percent global advanced packaging share by 2035

Malaysia will proceed with its fuel subsidy reform despite the looming possibility of a general election, as stated by Deputy Finance Minister Liew Chin Tong. The government is committed to its reform agenda to ensure economic stability and sustainability, focusing on long-term fiscal health. This decision is part of broader efforts to address fiscal deficits and optimize resource allocation, although specific details on the timeline or nature of the reforms have not been disclosed.

CoinLive

Malaysia to Proceed with Fuel Subsidy Reform Amid Election Speculation

Malaysia's economic growth is projected to slow to 5.3% in Q1 2025, down from 6.3% in Q4 2024, according to a Reuters poll. This slowdown is attributed to a normalization in growth, despite strong household consumption supported by fuel subsidies and ongoing exports. The economy is expected to grow 4.5% for the year, aligning with Bank Negara Malaysia's forecast. The mining sector saw a contraction of 1.1% due to reduced crude oil and natural gas production. Bank Negara maintained its interest rate at 2.75% for stability and sustainable growth.

- According to a Reuters survey, Malaysia's economic growth is expected to slow in the first quarter following its largest expansion in over three years, primarily due to normalization of growth.  
- Strong household consumption, supported by fuel subsidies, and continued export demand are sustaining the economy, with anticipated year-on-year growth of 5.3% for early 2025.  
- Despite a contraction in mining, growth remains resilient, projected at an average of 4.4% for the year, aligning with Bank Negara Malaysia’s forecast of 4% to 5%.

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Thomson Reuters

Malaysia economic growth likely slowed to 5.3 per cent in January-March

Malaysia is considering further cuts to fuel subsidies despite the potential for a general election this year. Deputy Finance Minister Liew Chin Tong indicated that the government may reduce the quota of subsidised fuel while protecting lower-income individuals amid rising global energy costs. The government is also reviewing a targeted subsidy approach for higher-income earners. Malaysia's fuel subsidy spending has surged, with expected costs reaching RM7 billion in April, significantly higher than before the Iran conflict. The subsidised fuel price remains unchanged at RM1.99 per litre since February 28.

Businesstimes News

Malaysia mulls further fuel subsidy cuts even as election looms

Malaysia's central bank has maintained its benchmark interest rate at 2.75% for the fifth consecutive meeting, citing modest inflation and steady growth despite energy supply disruptions from the Middle East conflict. The bank noted that uncertainties from the conflict could impact domestic growth and inflation, although Malaysia's strong fundamentals are expected to support economic resilience. The economy is projected to grow between 4%-5% this year, with inflation averaging 1.6% and 2.1% in the first quarter of 2026. Most economists expect no change in the policy rate for the remainder of the year.

- Malaysia's central bank maintained its benchmark interest rate at 2.75% during its fifth consecutive policy meeting, supported by moderate inflation and stable growth despite energy supply disruptions from Middle Eastern conflicts.  
- The bank reported that Malaysia's growth momentum persisted in Q1, driven by robust domestic demand and strong exports, with forecasts indicating an economic growth of 4% to 5% for the year.  
- The bank noted that while global commodity price increases due to war could raise domestic cost pressures, current monetary policy remains appropriate for sustaining price stability and economic growth.

Malaysia holds key rate steady, but warns of uncertainties from Middle East conflict

Malaysia's economic growth is projected to slow to 5.3% in Q1 2025, down from 6.3% in Q4 2024, according to a Reuters poll. This slowdown is attributed to a normalization in growth, despite strong household consumption supported by fuel subsidies and ongoing exports. The economy is expected to grow 4.5% for the year, aligning with Bank Negara Malaysia's forecast. The mining sector saw a contraction of 1.1% due to reduced crude oil and natural gas production. The central bank maintained its interest rate at 2.75% for stability and sustainable growth.

- A Reuters survey of economists indicates that Malaysia's economic growth may slow in Q1 after achieving its largest expansion in over three years in the previous quarter.  
- Strong household consumption supported by fuel subsidies and ongoing exports continue to bolster the economy, although a forecasted growth of 5.3% for Q1 2025 is lower than 6.3% in the last quarter.  
- Despite some sectors contracting, overall growth remains resilient, with the Bank Negara Malaysia maintaining the benchmark interest rate at 2.75% to support price stability and sustainable economic growth.

Malaysia economic growth likely slowed to 5.3% in January-March

Malaysian Prime Minister Anwar Ibrahim will announce a strategy to stabilize the nation's oil supply amid uncertainties from the Iran conflict. This move aims to mitigate potential disruptions in Malaysia's energy sector, as heightened tensions in the Middle East raise concerns over global oil markets. The strategy will address both immediate and long-term challenges in securing Malaysia's energy needs.

Malaysia to Announce Plan to Secure Oil Supply Amid Iran Conflict

Bank Negara Malaysia will release final first-quarter growth data, with advance estimates indicating a 5.3% growth rate. The economy is expected to maintain its momentum due to strong domestic demand and exports, supported by government subsidies that help control inflation and boost consumer spending. Rising investments, particularly in data centers, are also anticipated to enhance demand, according to Capital Economics.

- Bank Negara Malaysia will release the final first-quarter growth data, with advance estimates indicating a 5.3% growth rate.  
- The economy is expected to maintain its growth momentum, driven by strong domestic demand and exports, as well as government subsidies that help mitigate inflation.  
- Capital Economics also highlighted that rising investments, including in data centers, will further bolster demand.

MorningStar

Week Ahead for FX, Bonds: U.S. Inflation Data, -2-

Bank Negara Malaysia maintained its benchmark interest rate at 2.75% for the fifth consecutive meeting, citing risks to domestic growth and inflation from the ongoing Middle East conflict. The central bank noted that while Malaysia's economy shows growth momentum, uncertainties from the conflict could impact the outlook. Economists expect no rate changes for the rest of the year, although some foresee a potential hike if inflation rises unexpectedly. The government’s subsidy bill has significantly increased due to higher global commodity prices linked to the conflict.

- On May 7, 2026, Bank Negara Malaysia maintained the benchmark interest rate at 2.75%, citing risks to domestic growth and inflation from ongoing Middle Eastern conflicts.  
- Despite uncertainties regarding the conflict's duration, Malaysia's economy continues to show growth momentum, with a projected GDP growth of 4% to 5% for 2026, down from 5.2% the previous year.  
- The central bank indicated that rising global commodity prices due to the conflict may increase domestic cost pressures, although these impacts are expected to remain manageable.

Barclays

Bank Negara Malaysia holds key rate steady, flags risks from Middle East crisis

Malaysia is implementing cloud seeding to combat drought affecting rice production in its northern region, which is crucial for food security. The agricultural minister highlighted that prolonged dry weather has delayed planting, with farmers missing two of three planting phases. While over 50% of rice fields are prepared, few have been planted due to lack of rain. Rising fuel costs further complicate the situation. The government is also introducing programs to offset these costs, but farmers express skepticism about the effectiveness of the measures.

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