Malaysia’s industrial production rose only 0.3% year-on-year in May, missing expectations and marking its slowest growth since late 2023. Manufacturing slowed to 2.8%, while mining output plunged 10.2%, dragging overall performance.
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BNM Cuts Interest Rate Amid Weak Industrial Production Data
In response to the economic slowdown, Bank Negara Malaysia cut its key interest rate by 25 basis points — the first reduction since 2020. Economists warn of further risks ahead, with OCBC revising Malaysia’s 2025 GDP forecast from 4.3% to 3.9%.
Additional rate cuts may follow if data continues to weaken, especially as external risks rise, including potential new U.S. tariffs under President Trump’s administration.
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