KUALA LUMPUR, Aug 7 — June 2025’s stronger-than-expected Industrial Production Index (IPI) points to solid second-quarter gross domestic product (2Q GDP) growth of 4.5 per cent year-on-year (y-o-y), with potential upside towards 4.6 per cent, according to RHB Investment Bank Bhd (RHB IB).
Data released by the Statistics Department Malaysia (DOSM) today revealed that Malaysia’s IPI rose by three per cent y-o-y in June 2025 from 0.3 per cent y-o-y in May 2025, mainly driven by growth momentum in the manufacturing and electricity sectors.
“This was higher than our in-house projection of -0.5 per cent y-o-y, and Bloomberg consensus estimate of 0.5 per cent y-o-y,” RHB IB said in a statement today.
Bank Negara Malaysia and DOSM are scheduled to announce the 2Q GDP results on Friday (August 15).
Moving forward, RHB IB expects Malaysia’s industrial production outlook in both the near and longer term to be supported by greater clarity on reciprocal tariffs and the 13th Malaysia Plan (13MP).
“Greater clarity on reciprocal tariffs — such as the United States (US) imposing a reduced 19 per cent tariff on Malaysia from 25 per cent announced previously — will help improve market sentiment and gradually lift industry confidence in externally-led growth,” it said.
For the longer term, the 13MP, which outlines a total funding requirement of RM611 billion for the 2026–2030 period, in addition to the projected annual GDP growth of 4.5 to 5.5 per cent over the next five years, suggests that Malaysia's manufacturing space will continue to be a key pillar of growth.
Nonetheless, RHB IB noted that trade headwinds continue to weigh on Malaysia’s outlook, with renewed global tariffs, especially the proposed 100 per cent US semiconductor tariff, posing risks to export-driven sectors.
