By Media Selangor Team
SHAH ALAM, Aug 19 — The government expects Malaysia’s economy to lose between 0.6 and 1.2 percentage points of gross domestic product (GDP) growth in 2025 following retaliatory tariffs imposed by the United States.
Investment, Trade and Industry (Miti) Minister Tengku Datuk Seri Zafrul Abdul Aziz said while Malaysia successfully negotiated a reduction of the tariff rate from 25 per cent to 19 per cent during talks with Washington that began in May, the imposition would still dampen economic momentum.
“Initial analysis projects that the tariff imposed on Malaysia’s exports to the US will reduce GDP growth in 2025 by 0.6 to 1.2 percentage points compared with earlier forecasts,” he said In a written reply to Betong MP Datuk Richard Rapu yesterday.
He added that the drag would also be felt in 2026 as the tariff’s impact plays out over the full year, though the government is still assessing its effects on inflation in critical sectors such as food, energy, and transport.
Zafrul said Putrajaya is adopting proactive measures to cushion the blow, including urging exporters to leverage Malaysia’s 18 free trade agreements to diversify markets and boosting productivity under the New Industrial Master Plan 2030 and National Semiconductor Strategy.
Other measures include channelling RM500 million in soft financing through development finance institutions to help small and medium enterprises, allocating RM25 billion for the GEAR-uP programme to revitalise government-linked companies and strategic sectors, and implementing reforms to improve public service delivery for businesses.
