30/08/2025

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SATURDAY | AUG 30, 2025

M’sian economy faces fresh downside risks: AmBank

Bank Negara: Official reserve assets at US$121.28b end-July KUALA LUMPUR: Malaysia’s official reserve assets amounted to US$121.28 billion (RM511.56 billion) as at end-July, while other foreign currency assets stood at US$603.7 billion, according to Bank Negara Malaysia (BNM). The central bank said that in accor dance with the International Monetary Fund Special Data Dissemination Standard (IMF SDDS) format, the detailed breakdown of international reserves provides forward looking information on the size, compo sition and usability of reserves and other foreign currency assets. It also offers guidance on the expected and potential future inflows and outflows of foreign exchange of the federal govern ment and BNM over the next 12 months. “Overall, the detailed breakdown of international reserves under the IMF SDDS format indicates that as at end-July 2025, Malaysia’s international reserves remain usable,” the central bank said in a state ment yesterday. For the next 12 months, BNM said, the predetermined short-term outflows of foreign currency loans, securities and deposits, including scheduled repayment of external borrowings by the government and the maturities of foreign currency Bank Negara interbank bills, amounted to US$14.65 billion. “The net short forward positions amounted to US$21.17 billion as at end-July 2025, reflecting the management of ringgit liquidity in the money market. “In line with the practice adopted since April 2006, the data excludes projected foreign currency inflows arising from interest income and the drawdown of project loans. Projected foreign currency inflows amount to US$2.68 billion in the next 12 months,” it said. Meanwhile, BNM said the only contingent short-term net drain on foreign currency assets is government guarantees of foreign currency debt due within one year, amounting to US$417.1 million. “There are no foreign currency loans with embedded options, no undrawn unconditional credit lines provided by or to other central banks, international organisations, banks and other financial institutions. “Bank Negara Malaysia also does not engage in foreign currency options vis-à-vis ringgit,” it added. – Bernama

Ű BY DEEPALAKSHMI MANICKAM sunbiz@thesundaily.com

o External factors, including US tariffs, and fragile sentiment at home cloud second-half 2025 outlook, says chief economist

KUALA LUMPUR: Malaysia’s economic growth outlook has tilted further to the downside as external shocks from US reciprocal tariffs and fragile domestic sentiment cloud the recovery. AmBank Group chief economist Firdaos Rosli, in presenting the bank’s second-half macroeconomic outlook for Malaysia, said AmBank has maintained its 2025 gross domestic product (GDP) growth forecast at 3.8%, but cautioned that risks are increasing. “Our exports are still highly concentrated in electronics and machinery, and the new reciprocal tariffs have added a layer of cost. At the same time, private consumption, while resilient on paper, is constrained by low capacity to spend,” he told reporters at a media briefing yesterday. Malaysia’s exports to the United States have fallen sharply since Washington imposed a 19% reciprocal tariff earlier this month. AmBank estimates that 53.9% of Malaysia’s exports to the US are now affected, with only semiconductors, which account for roughly 46% of shipments, exempt for the time being. “Electronics and machinery account for about 72% of Malaysia’s exports to the US. That concentration exposes us to both the global semiconductor cycle and tariff risks. If the US extends duties to semiconductors, the impact would be severe,” Firdaos said. He added that while Malaysia remains more competitive than China in sectors such as rubber gloves, where tariffs on Chinese products remain higher, the broader rise in trade costs cannot be ignored. “What exporters actually pay has jumped from around 3.4% in 2023 to 19% this year. This is a significant added layer of cost,” he noted. Despite Malaysia’s tight labour market, with unemployment at 3% and wages rising, household spending has not picked up as strongly as expected. Firdaos described this as a paradox: “By right, propensity to spend should be stable or higher, but loan applications and disbursements have tapered in recent months. That signals a low capacity to spend.” AmBank projects private consumption growth of 5% for 2025, but Firdaos said the figure could be higher if confidence improves.

Firdaos presenting AmBank’s second-half 2025 macroeconomic outlook for Malaysia yesterday.

ownership and debt levels,” he observed. Firdaos suggested that the government’s fiscal strategy would be shaped not only by economics but also by politics. “Once we hit the midpoint of the political cycle, the remaining budgets will typically focus on being pro-people. That means reforms will be more gradual and calibrated, especially with state elections in Sabah, Sarawak and Johor on the horizon.” Firdaos said China’s ability to sustain growth above 5% would help regional trade sentiment, but warned against expecting a major rebound spillover. “China’s strategy is still very export driven and aggressive, especially in sectors like automobiles. If they remain stable, it provides some cushion, but Malaysia cannot rely on China alone to lift growth.” Looking ahead, Firdaos emphasised that Malaysia’s growth outlook is skewed to the downside, with external conditions likely to remain volatile. “The key challenge for businesses will be navigating higher trade costs and weaker global demand, while policymakers must balance fiscal consolidation with pro-growth spending. The second half of 2025 will test how resilient domestic demand really is,” he said.

Government measures, such as the RM100 cash aid, may provide a temporary boost, but he characterised the move as a “policy experiment” rather than a game-changer. Household debt, at 85% of GDP, remains elevated but is primarily tied to wealth generating assets, such as housing, rather than depreciating assets like cars or credit cards. “The concern should be on the bottom layers of debt, not the headline ratio,” Firdaos stressed. Malaysia’s fiscal deficit is expected to narrow to 3.8% of GDP by year-end, providing the government with limited room to support the economy in the second half of 2025. “This means the upcoming budget will likely be pro-growth, people-centric and gradual. “We do not expect new broad-based taxes, though a carbon tax could be introduced in 2026,” Firdaos said, adding that the political mid cycle and upcoming state elections would shape the government’s strategy. He cautioned that the planned rationalisation of the RON95 fuel subsidy remains unclear, with implementation details still under discussion. “Until we see the nuts and bolts, scepticism will remain. This government appears to be taking a more nuanced approach that goes beyond income, also to consider asset

BCorp stays resilient with RM9.34b revenue in FY25 amid challenging market PETALING JAYA: Berjaya Corporation Bhd (BCorp) recorded revenue of RM2.37 billion for the fourth quarter ended June 30, 2025 (Q4 FY25), with an improved operating profit of RM89.84 million compared with RM66.69 million in the same period last year. from overseas store closures and HR Owen’s lower new car sales, though its used car business performed well, and the introduction of Lotus marked a strategic expansion. Lottery maintained growth despite fewer draws. Foreign exchange pressures and restruc boosted by one-off gains from subsidiary disposals. Looking ahead, BCorp remains focused on strengthening its core businesses while positioning for growth in FY26.

turing measures impacted retail contributions, while property revenue was lower following the completion of The Tropika project and the absence of last year’s overseas contributions. The group reported a pre-tax

The group expects Malaysia’s economic expansion to be supported by strong domestic demand and moderating inflation, despite global uncertainties. Tourism recovery and resilient consumer spending are set to benefit its hospitality, retail, and services operations, while STM Lottery is expected to maintain its leadership in the legalised NFO sector, driven by the popularity of its Jackpot and Digit games. “Barring unforeseen circumstances, the board is cautiously optimistic that the per formance of the group’s business operations for FY26 will be satisfactory,” BCorp said.

Food retail revenue moderated due to fewer Starbucks outlets and impairments on underper forming stores. At the same time, the property narrowed its pre-tax loss due to stronger residential sales and the reversal of over-provisioned expenses. For the full year, BCorp reported revenue of RM9.34

The group’s performance reflected resi lience across several segments despite market challenges. The hospitality division delivered stronger revenue and profit, driven by higher occupancy rates, while Cosway enhanced margins through a more favourable product mix and cost savings. STM Lottery also contributed positively with higher revenue from larger accumulated jackpots, reinforcing its strong market presence. Retail’s non-food segment faced pressure

loss of RM419.48 million, mainly due to non-cash impairments of RM437.28 million on non-per forming assets in line with accounting standards. These provisions are not cash outflows and may be reversed should con ditions improve. The previous year’s results had also been

billion compared with RM10.09 billion in FY24. Hospitality recorded higher revenue due to sustained tourism demand, while the STM