10/07/2025

Editorial T: 03-7784 6688 F: 03-7785 2625 E: sunbiz@thesundaily.com Advertising T: 03-7784 8888 E: advertise@thesundaily.com

SCAN ME

THURSDAY | JULY 10, 2025

Inflation likely to be under control PETALING JAYA: Bank Negara Malaysia has reaffirmed that the impact of current and upcoming domestic policy reforms on inflation is expected to remain manageable – a view in line with analysts’ estimates. OCBC Bank (Malaysia) Bhd global markets research & strategy senior Asean economist Lavanya Venkateswaran said even if the planned rationalisation of RON95 fuel takes effect in October 2025, with a potential price increase of 20–25%, the adjustment is projected to add only 0.5 percentage points to headline inflation, bringing it to 2% for the year. She said this moderate level suggests that inflation will stay within a range that allows BNM to maintain a policy stance supportive of economic growth. o OPR cut signals BNM’s commitment to steady growth and fiscal reform support remained strong in the first half of 2025. “With inflation likely to stay under control despite subsidy reforms and slower growth, we forecast that BNM will cut the policy rate by another 25 basis points – either at the Sept 4 or Nov 6 meeting – bringing it down to 2.50% by the end of 2025.” Meanwhile, BNM has stated that it will continue to take proactive steps to support the country’s economic momentum as global growth shows signs of steady expansion. The central bank said the decision reflects an effort to sustain domestic economic resilience, in line with global trends showing continued growth – largely driven by strong consumer spending and, to some extent, early demand brought forward by businesses. Further, BNM also noted that the global growth outlook would remain supported by positive labour market conditions, less restrictive monetary policy, and fiscal stimulus. This outlook is weighed down by uncertainties surrounding tariff developments, as well as geopolitical tensions. continued growth in economic activity in the second quarter, underpinned by sustained domestic demand and export growth. Moving forward, the central bank expects resilient domestic demand to support growth. Employment and wage growth, particularly within domestic-oriented sectors, as well as income-related policy measures, will support household spending, it said. “The expansion in investment activity will be sustained by the progress of multi-year projects in both the private and public sectors, the continued high realisation of approved investments, as well as the ongoing implementation of catalytic initiatives under the national master plans.”

risks, primarily due to slower global trade, weakened sentiment, and lower-than-expected commodity production. Headline and core inflation averaged 1.4% and 1.9% in the first five months of the year, respectively, BNM noted. Overall, inflation in 2025 is expected to remain moderate amid contained global cost conditions and the absence of excessive domestic demand pressures, it said. BNM said although Malaysia’s economy remains resilient, growth prospects could still be affected by external uncertainties. It said the ringgit’s performance will continue to be influenced by global factors, but strong economic fundamentals and structural reforms are expected to provide steady support. Against this backdrop, BNM’s recent rate cut is a pre-emptive move to safeguard growth, with the central bank remaining watchful of risks to both inflation and economic momentum. Bernard Dompok said Berjaya Sompo Insurance recognises the needs of MSMEs in managing their risks of financial losses arising from unforeseen events. “Berjaya Sompo is introducing this tailored solution for MSMEs that is both affordable and aligned with each business’s unique needs. “By providing accessible and flexible protection, we aim to help businesses recover more quickly and continue playing a vital role in driving the economy forward,” he said in his speech at the launch event. Also present were Sompo international president of consumer lines for Asia Pacific Bill Zhang, and Berjaya Sompo Insurance CEO Tan Sek Kee, alongside senior leaders and industry stakeholders. Tan said the Sompo FlexiSME, together with Berjaya Sompo’s fire coverage, is designed with one goal in mind: to give SME owners the flexibility to protect what matters most to their business without breaking the bank. “This solution offers coverage that can be customised to suit individual needs, from property and liability to group personal accident protection.” With modules covering Property Damage, Fire and Theft, Public Liability, Employer’s Liability, Group Personal Accident, and more, SOMPO FlexiSME is offered as a bundle with Berjaya Sompo’s Fire or SOMPO Fire policy. The SME solution is now available through authorised agents nationwide.

At its latest meeting, the Monetary Policy Committee (MPC) decided to cut the Overnight Policy Rate (OPR) by 25 basis points to 2.75% yesterday, aiming to create a more supportive monetary environment. The ceiling and floor rates of the OPR corridor have also been adjusted to 3.00% and 2.50% respectively.

“Our GDP forecast for 2025 stands at 3.9% year-on-year, but we expect growth to slow sharply in the first half of the year to 3.6% from 4.3% if the 25% US tariffs are implemented on Aug 1 without any exemptions. “We expect this to weigh on domestic demand, which has Gold association appoints shariah advisory board KUALA LUMPUR: The Malaysia Gold Association (MGA) has appointed an independent institutional Shariah Advisory Board (SAB), which is the world’s first. This represents a major move forward to provide shariah governance and advisory on shariah compliance for the entire precious metals ecosystem, to foster greater confidence in Malaysia’s gold industry on the global stage. The newly appointed board will function as an independent body of experts, providing shariah leadership to MGA, its members, and the overall gold industry in matters pertaining to shariah governance for the industry-wide. The SAB is responsible for endorsing shariah-related gold industry best practices and standardised references and advising industry issues on financial and physical gold transactions, ensuring all activities are aligned with the shariah rules and requirements. In a statement, MGA president Datuk Wira Louis Ng said the establishment of SAB marks a pivotal step in advancing Malaysia’s leadership in shariah-compliant precious metals trading. “As a strategic initiative, it strengthens the nation’s role as a key hub for Islamic finance and shariah-compliant gold trading. “Also, by institutionalising shariah oversight within the industry, MGA is setting new standards for compliance and building greater trust among investors and consumers – particularly within the global Muslim community.” To date, MGA remains the only organisation to have established an independent shariah board dedicated to governing and advising on shariah compliance for the world’s precious metals ecosystem.

It said favourable trade negotiation outcomes, pro-growth policies in major economies, continued demand for electrical and electronic goods, and robust tourism activity could raise Malaysia’s export prospects. However, the growth outlook remains vulnerable to downside

Increased volatility in global financial markets and commodity prices could also result from these uncertainties. For Malaysia, BNM said the latest developments point towards

US tariff on Malaysian goods politically driven, says SME Corp chairman

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

KUALA newly announced 25% tariff by the US on Malaysian goods is a harmful move rooted in political motivations, says SME Corporation Malaysia chairman Tan Sri Panglima Bernard Giluk Dompok. He criticised the decision as being driven by a president with his own vision of national greatness – one that risks straining economic ties and undermining fair trade practices. “We have been subjected to many inconveniences by them, and it is hurting many other people,” he told SunBiz on the sidelines of the launch of Sompo FlexiSME by Berjaya Sompo Insurance Bhd yesterday. He highlighted that the tariff will also have an impact on members of the BRICS community. Previously, it was reported that the US has threatened to impose an additional 10% tariff on any country aligning with “anti-American policies” of the BRICS bloc. Furthermore, Bernard Dompok stated that trade disruptions will definitely impact small and medium-sized enterprises (SMEs) in Malaysia, even if larger companies seem to be the primary targets initially. “When the supply chain goes down, it will affect everybody,” he said, adding that the US tariff shows that the current global system is unstable and flawed. “And probably, again, the LUMPUR: The

Bernard Dompok says everybody will be affected when the supply chain goes down. – ADIB RAWI YAHYA/THESUN

business in the years ahead, as more entrepreneurs seek greater security. “More and more people want to be assured that they’re not going to face total failure if something doesn’t work out.” The Sompo FlexiSME is an insurance solution developed to support Malaysia’s small and medium-sized enterprises (SMEs) in navigating business risks and achieving greater financial resilience.

multipolar system for the world must take its place.” Separately, Bernard Dompok said that he had inquired about the availability of insurance coverage for trading risks to help businesses mitigate losses from trade-related disruptions. “But it seems that, at the moment, that’s not possible,” he said. Nevertheless, he expressed optimism that insurance will become an integral part of doing