Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
Gross domestic product (GDP) growth in Malaysia is expected to reach the upper end of Bank Negara Malaysia’s (BNM) 4% to 5% target for 2024, according to CIMB Treasury and Markets Research.
Key Takeaways:
GDP Growth Projection: CIMB anticipates GDP growth to hit the upper range of BNM’s forecast, following a robust 5.8% year-on-year increase in the advance GDP estimate for the second quarter of 2024 (2Q2024).
Contributing Factors:
- Resilient Labour Market
- Robust Household Spending
- Ongoing Multi-Year Investments
- Increased Foreign Direct Investment (FDI) Realisation
- Trade Recovery
- Improving Tourism
Ringgit Performance: The ringgit has outperformed its peers, supported by coordinated actions moderating pressure from rate differentials, global developments, and geopolitical risks.
Foreign Exchange Flows: BNM has observed healthier two-way forex flows, driven by investment income, export conversions, and fast-track flexibility for corporates to invest abroad. Market-driven interventions aim at managing domestic ringgit liquidity.
Government-Linked Investments: Malaysia is directing liquidity towards investments to stimulate growth. Government-linked investment companies are set to allocate between RM400 billion and RM500 billion over the next five years. These investments will focus on developing incentives and regional ecosystems like the Johor-Singapore Special Economic Zone, Forest City, and various industrial park projects.
Impact on Securities Yields and Currency Exchange Rates: The implementation of reforms and a stronger foundation for Malaysia’s domestic fundamentals are likely to enhance Malaysia Government Securities yields, targeting 3.75%-3.80% over 12 months. Additionally, improving investor sentiment and potential US policy rate cuts are expected to influence the US dollar to ringgit exchange rate, targeting 4.53 over the same period.
CIMB’s optimistic outlook for Malaysia’s GDP growth is supported by a combination of strong economic fundamentals, strategic investments, and proactive measures by BNM to stabilize the currency and manage liquidity.
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