16/08/2025

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SATURDAY | AUG 16, 2025

BNM: Steady growth amid global trade shifts

Oil and gas exports fell to RM16 billion, down from RM20 billion, while LNG exports were worth over RM5 billion. LNG exports rose 4.3% from May to June, as most maintenance work was completed. This should help lift the current account balance in the second half, with the full-year surplus still expected to land within the 1.5%–2.5% of GDP range. Foreign direct investment also cooled significantly, with net inflows in Q2 falling to RM1.6 billion from RM15.6 billion in Q1. While fresh equity injections totalled RM8.6 billion and debt instrument inflows added RM5 billion, these were more than offset by RM12 billion in reinvested earnings outflows as multinational corporations repatriated profits. - by HAYATUN RAZAK Genting Malaysia undertakes RM2.2b restructuring of US unit Empire Resorts PETALING JAYA: Genting Malaysia Bhd is undertaking a RM2.2 billion restructuring of its wholly owned US subsidiary, Empire Resorts Inc, to strengthen its capital structure and sharpen its long-term strategic focus in the northeastern US gaming market. In a filing with Bursa Malaysia yesterday, Genting Malaysia said Empire will dispose of its non-gaming assets – including Resorts World Catskills Hotel, Alder Hotel, Monster Golf Course, RWC Epicenter and various restaurants – to Sullivan County Resort Facilities Local Development Corpo ration (SCRFLDC) for US$525 million (RM2.2 billion). Proceeds from the sale will be used to acquire 1,554.6 acres of land from EPR Properties for US$201.3 million (RM848.1 million), giving Empire full ownership of the land under both its gaming and non-gaming operations, along with additional development-ready land. The acquisition eliminates prior lease obligations, enabling Empire to better control its strategic assets. The disposal proceeds will also be used to fully redeem Empire’s outstanding US$300 million senior unsecured notes due November 2026. This early redemption will leave Empire debt free and significantly improve its financial position by eliminating high-interest pay-ments. Following the asset sale, Empire will lease back the non-gaming properties from SCRFLDC under a long-term land lease agreement running through 2066, ensuring continued operational control. Additionally, Empire will manage these assets under a 20-year agreement with SCRFLDC, with automatic renewals of up to 10 more years. The restructuring is expected to improve Empire’s cost structure by removing lease payments to EPR and reducing interest expenses, while generating a surplus of about US$10 million to support working capital. Genting Malaysia said this strategic realign ment enhances Empire’s financial flexibility and asset base, reinforcing its competitiveness in the New York State gaming sector. The group added that Empire and SCRFLDC are currently finalising the detailed terms of the agreements. This marks a key milestone in Genting Malaysia’s ongoing efforts to streamline its international operations and maximise long term shareholder value.

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

o Malaysian economy expands 4.4% in second quarter, central bank says no need to tweak forecasts further

KUALA LUMPUR: Bank Negara Malaysia (BNM) sees no further change in its forecast as the US tariff aligns with its assumptions, noting that the new 2025 gross domestic product (GDP) growth forecast of 4% to 4.8% already factors in possible outcomes. BNM governor Datuk Seri Abdul Rasheed Ghaffour said there is no need for the central bank to revise the growth numbers further, adding that BNM has modelled two scenarios with a low tariff outcome of 13% US effective tariff rate on the world and a high tariff outcome of 29%. “The tariff assumptions are already ‘priced in’ to the growth forecast. Even with the new 19% US tariff agreed in the negotiations, the number falls within that 13%–29% range we had budgeted for,” Abdul Rasheed said at a press conference on Malaysia’s second quarter GDP yesterday. He said there is no new factor that would cause the central bank to recalculate its growth projections, as the actual tariff outcome sits comfortably within the range. The governor emphasised that tariffs are not an effective solution to trade relations issues, noting that a rule-based system remains the best approach. While acknowledging that tariffs benefit no one, he welcomed the conclusion of tariff talks between the US and its trading partners, saying the outcome provides much-needed certainty for businesses, investors and households. Yesterday, the central bank announced that Malaysia’s economy grew 4.4% in the second quarter of 2025, matching the first quarter’s performance, driven by resilient domestic demand despite softer external conditions. Household spending remained robust, supported by a firm labour market and income related policy measures such as higher minimum wages and civil service pay revisions. Private and public investments recorded stronger gains, underpinned by new and ongoing projects. On the external front, export growth moderated due to weaker commodity-related shipments, partly offset by sustained electrical and electronics exports and healthy tourism activity. Imports expanded, reflecting higher

Abdul Rasheed (right) and Chief Statistician of Malaysia Datuk Seri Dr Mohd Uzir Mahidin displaying copies of Bank Negara’s second quarter economic bulletin at a press conference in Kuala Lumpur yesterday. – BERNAMAPIC

strengthened by 5.1% against the US dollar, supported by broad weakness in the greenback, expectations of slower US growth and proactive domestic foreign exchange market measures. Private-sector credit grew 5.2%, with household loans rising 6% and business loans increasing 4.5%, reflecting steady financing demand for investment and working capital. Looking ahead, Abdul Rasheed said the external environment remains challenging, and tariff uncertainty continues to linger, and the impact will take time to materialise fully. “Nonetheless, let me stress that Malaysia is facing these challenges from a position of strength. Our economy remains on a solid footing, supported by resilient domestic demand, continued demand for E&E goods and a diversified export structure. “The steady rollout of structural reforms, such as the national master plans and fiscal reform measures, is critical to boost our resilience against future shocks,” he said. Abdul Rasheed noted that while exports faced challenges, including a 19% US tariff on Malaysian goods introduced earlier this month and a potential 100% tariff on semiconductors, there are still sources of strength. Rising global demand for electrical and electronic goods, along with a rebound in tourist arrivals, is expected to support exports moving forward. Meanwhile, Malaysia’s current account surplus narrowed sharply in Q2 to RM16.7 billion (0.1% of GDP) from RM38.5 billion (3.4% of GDP) in Q1. The drop was mainly due to planned maintenance at oil and gas facilities, which pushed exports lower.

demand for capital goods in line with increased investment. On the supply side, services growth was driven by consumer-related and government services while manufacturing benefited from domestic-oriented clusters but was hindered by disruptions in petroleum output. Agriculture improved on higher oil palm production but mining contracted due to planned maintenance work. On a seasonally adjusted basis, GDP rose 2.1% quarter-on-quarter, compared with 0.7% in the previous quarter. Headline inflation eased to 1.3% from 1.5% in the first quarter, while core inflation held steady at 1.8%. The moderation reflected lower fuel prices and slower increases in food costs, partially offset by a smaller decline in mobile service prices. Inflation pervasiveness eased to 41.8%, in line with the long-term average. Meanwhile, the ringgit’s nominal effective exchange rate appreciated by 1.5% against the currencies of major trading partners and

Data centre investments set to boost export capacity: Abdul Rasheed KUALA LUMPUR Ongoing investments in data centres are expected to boost Malaysia’s export capacity from the second half of 2025, despite a temporary increase in imports, said Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour. “While the benefits might be modest now, these investments will pay off by boosting Malaysia’s ability to earn from exports in the future, especially in the second half of the year and beyond,” he added. Inflation has remained tame, with consumer prices in June rising just 1.1% year on year, the slowest pace in over four years.

BNM reported that Malaysia’s economy grew 4.4% year on year in Q2 2025, matching the performance of the first quarter and slightly below the 4.5% forecast. On a seasonally adjusted quarter-to-quarter basis, growth was 2.1%, up from 0.7% in the first quarter. The central bank has revised its full-year GDP growth outlook to 4.0%–4.8%, down from the earlier 4.5%–5.5% range, citing global trade uncertainties. BNM cut interest rates in July for the first time in five years to forestall economic headwinds.

He explained that the spike in imports is mainly due to the building and upgrading of data centres. “Our workforce and machinery are strong, which is positive. We are increasing our productivity and export capacity for the future,” he said at a press conference yesterday on Malaysia’s second-quarter economic performance. Some data centres have already begun serving overseas clients, which he said is an encouraging early sign.