KUALA LUMPUR, Dec 12 — Malaysia's Industrial Production Index (IPI) growth is projected to remain resilient in 2025, ranging between 3.2 and 3.6 per cent, driven by the stronger-than-expected growth in October, said analysts.
OCBC Global Market Research said the country’s October industrial production index growth of 6.0 per cent year-on-year (y-o-y), versus 5.7 per cent in September, outpaced expectations of a modest slowdown.
It noted that the primary driver of October's IPI was the manufacturing sector, where production rose 6.5 per cent y-o-y, up from 5.0 per cent in September.
"We expect IPI growth to remain resilient, averaging 3.6 per cent y-o-y in 2025 before slowing to 3.0 per cent in 2026. This is consistent with our forecast for 2026 gross domestic product (GDP) growth to slow to 3.8 per cent y-o-y from 4.6 per cent in 2025," it said in a note.
MBSB Investment Bank Bhd (MBSB IB) sees upside to its 2025 IPI growth projection for Malaysia, but maintains its 3.2 per cent forecast. The potential upgrade will reflect resilient trade and production activity seen in recent months, defying earlier concerns about the impact of tighter trade rules.
"To a certain extent, increased production was also driven by front-loading activities by companies ahead of the higher reciprocal tariff implementation. On that note, we expect the normalisation of production, and the high base could translate into more moderate IPI growth next year.
"Still, we expect growing domestic consumption and business activities will drive output growth for domestic-oriented sectors going into next year," it said.
