Malaysia’s Economy Faces External Risks In 2027 – Economist

KUALA LUMPUR, Oct 8 (Bernama) -- Malaysia’s economic growth is expected to face external risks in 2027, particularly geopolitical uncertainties, US trade protectionism, and high interest rates in advanced economies, an economist said.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ongoing conflict in the Middle East and protectionist policies under US President Donald Trump’s administration were among the external developments that warrant attention.

“The biggest risks are certainly external factors. We see that the war in West Asia is still ongoing. Then, the protectionist policies of the Trump administration remain widespread.

“More recently, we have seen higher interest rates, particularly in the bond markets of advanced economies such as the US, Europe and Japan. This signals that while an economy can still grow, there will come a time when interest rates need to be lowered,” he told reporters after the Bank Muamalat 2026 Corporate Economic Forum here today.

Mohd Afzanizam said the global economic cycle was currently proceeding smoothly, but the possibility of an economic downturn remains over the next three to four years.

For the domestic economy, should a general election be held next year, he said investors, particularly foreign institutional investors, are expected to assess policy developments, the political climate and the dynamics of the country’s political alliances.

-- BERNAMA