KUALA LUMPUR (Jan 9): MBSB Research has raised its full-year 2025 industrial production index (IPI) growth forecast to 3.6% from the earlier projection of 3.2%, on sustained resilience in industrial activity over recent months and milder trade impact.
The research house said in a note on Friday that the stronger-than-expected growth in recent months suggested that the impact of tighter trade rules and an uncertain external trade outlook has been milder than feared.
It forecast the IPI growth to remain around 3% this year, backed by growing domestic consumption and resilient external demand.
Malaysia's IPI — which measures output from factories, mines and power plants — rose 4.3% in November from a year earlier, the Department of Statistics Malaysia said in a statement. That compares to a Bloomberg survey’s median 5.3% rise and October’s 6.0% year-on-year gain. MBSB Research’s estimate was 5.1%.
On a month-on-month basis, the index contracted 1.1% in November, a reversal from October’s 2.1% increase.
Kenanga Research said manufacturing growth in 2025 may settle around 4.3%, exceeding its current projection of 3.9%, supported by better-than-expected performance in the fourth quarter.
While momentum is expected to hold going into year-end, Kenanga Research said in a research note that near-term conditions remain supported by expansionary manufacturing purchasing managers index readings in December, which recorded 50.1.
The research house maintained its GDP growth forecast for the fourth quarter at 5%, bringing full-year growth to 4.8% — lower than the 5.1% growth recorded in 2024 but higher than the Ministry of Finance's full-year GDP growth forecast of 4% to 4.8%.
Kenanga Research expects GDP growth to further ease to 4.2% in 2026 on global uncertainty and lingering geopolitical risks. However, it noted potential upside risks should the global technology cycle strengthen.