kuala lumpur:The Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) has decided to keep the Overnight Policy Rate (OPR) at 3.0 per cent during its meeting today.
BNM highlighted that global growth to 2024 remained above expectations, reflecting better results in major economies and stronger global trade.
“For 2025, the global economy is projected to be sustained by positive labor market conditions, moderate inflation and less restrictive monetary policy.
“Global trade is expected to remain broadly stable, supported by continued technological uplift,” it said in a statement today.
However, BNM said the outlook could be affected by uncertainty over greater trade and investment restrictions. Increased policy uncertainties could also lead to greater volatility in global financial markets.
As for the Malaysian economy, the central bank highlighted that overall growth for 2024 was in line with expectations.
“Going forward, economic activity is expected to remain strong in 2025, driven by resilient household spending. “Policy measures, including employment and wage growth, as well as increases in the minimum wage and salaries of civil servants, will support domestic spending,” BNM said.
It further said that the progress of multi-year projects in both the private and public sectors, continued high realization of approved investments, as well as the ongoing implementation of catalytic initiatives under the National Master Plan will sustain strong expansion in investment activity. ,
“These investments, supported by higher capital imports, will increase exports and expand the productive capacity of the economy.
“Global technological uptick, continued growth in non-electrical and electronics goods and higher tourist spending are expected to support exports.
“There are risks to the growth outlook due to an economic slowdown in key trading partners amid escalating trade and investment restrictions and lower-than-expected commodity production,” the central bank said.
Meanwhile, BNM said growth could potentially be higher driven by technological uplift, more robust tourism activity and faster implementation of investment projects.
Headline and core inflation averaged 1.8 percent in 2024.
It said inflation is expected to remain manageable in 2025 amid softening global cost conditions and the absence of excessive domestic demand pressures.
“Global commodity prices are expected to continue to decline, keeping cost conditions moderate in the near term.
“In this environment, the overall impact of recently announced domestic policy reforms on inflation is expected to be contained.
“The risk of a rise in inflation will depend on the extent of the impact of domestic policy measures as well as global commodity prices and financial market developments.
“The performance of the ringgit is mainly driven by external factors. “The narrowing interest rate differential between Malaysia and advanced economies is positive for the ringgit.”
While financial markets may experience volatility due to global policy uncertainties, BNM said Malaysia’s favorable economic prospects and domestic structural reforms, complemented by ongoing initiatives to stimulate inflows, will continue to provide enduring support to the ringgit. .
“At the current OPR level, the monetary policy stance remains supportive of the economy and is in line with current assessments of inflation and growth prospects.
“The MPC remains alert to ongoing developments to inform its assessment on the outlook for domestic inflation and growth.
“The MPC will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability,” BNM said.
