Malaysia’s Exporters Poised For Recovery As US Tariffs Ease - Kenanga IB

KUALA LUMPUR, Aug 1 (Bernama) -- The reduction in United States (US) import tariffs on Malaysian goods from 25 per cent to 19 per cent is expected to provide a timely boost for Malaysia’s export-oriented manufacturers, said Kenanga Investment Bank Bhd (Kenanga IB).

The investment bank said the tariff relief should help restore business confidence and enhance global competitiveness.

“As external conditions stabilise, the manufacturing sector is poised for a gradual recovery towards year-end, supported by the global tech upcycle, rising demand for 5G infrastructure, artificial intelligence (AI) deployment, and a wave of new product launches.

“These tailwinds, combined with improved trade flows, should help lift output and reinforce broader momentum,” the bank said in a note.

Kenanga IB noted that the manufacturing purchasing managers’ index (PMI) rose to 49.7 in July 2025 (June: 49.3), just below the neutral 50.0 threshold.

It said new orders continued to decline, albeit at the slowest pace in five months, aided by a rebound in new export orders, the strongest in eight months, while finished goods inventories also rose, reflecting stronger restocking activity.

 Against this backdrop, Kenanga IB maintained its 2025 gross domestic product (GDP) forecast at 4.3 per cent in 2025 (2024: 5.1 per cent), driven by resilient domestic demand and continued strength in key domestic-oriented industries.

“Recent policy measures, such as enhanced cash transfers, low fuel prices, and minimum wage hikes, are expected to bolster household spending, especially in the final quarter of the year,” it added.

-- BERNAMA