Bank Negara Malaysia Reduces OPR to 2.75% - First Adjustment Since 2023
Bank Negara Malaysia’s Monetary Policy Committee (MPC) has decided to reduce the Overnight Policy Rate (OPR) by 25 basis points to 2.75%, lowering the ceiling and floor rates to 3% and 2.5%, respectively. This decision comes amid a global economic environment that continues to grow, supported by strong consumer spending, resilient labor markets, and fiscal stimulus. However, uncertainties such as geopolitical tensions and fluctuating trade policies pose potential risks to global financial stability and commodity prices. In Malaysia, economic activity remains robust, with continued growth expected in the second quarter, driven by strong domestic demand and steady exports. Employment and wage gains, particularly in domestic-oriented sectors, along with supportive policy measures, are sustaining household spending. Investments are also expected to grow, supported by public and private sector projects and strategic national initiatives. Export prospects may improve due to pro-growth global policies and sustained demand for key products like electrical and electronic goods. Inflation remains moderate, with headline and core inflation averaging 1.4% and 1.9% respectively in the first five months of 2025. With global cost pressures contained and domestic demand steady, inflation is expected to remain subdued. The ringgit’s performance will continue to be shaped by external factors, though Malaysia’s solid economic fundamentals and reforms offer support.
Date: July 9, 2025
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FDI Inflows Bolster Optimism Among Malaysian Property Players for 2025
Industry players in Malaysia's real estate sector are optimistic about the market's prospects for 2025, driven by robust foreign direct investment (FDI) inflows and a resilient economic environment. According to the Malaysia Commercial Real Estate Investment Sentiment Survey (CREISS) 2025, 91% of respondents expressed optimism about the country's commercial real estate market, with 34% planning to increase their investments. This positive sentiment is supported by RM254.7 billion in approved investments during the first nine months of 2024—a 10.7% increase from 2023. The property market recorded 311,211 transactions valued at RM163 billion in the same period, indicating significant growth compared to the previous year.
Despite this optimism, challenges such as rising construction costs, increased building vacancy rates, and a high-interest-rate environment persist. The retail segment faces additional hurdles, including brand boycotts leading to declining sales and store closures. Nevertheless, Malaysia's economic outlook remains positive, with solid GDP growth of 5.2% year-on-year in the first nine months of 2024 and a strengthening labor market. Key investment hotspots identified for 2025 include Klang Valley and Johor, with sectors like data centers and industrial/logistics expected to drive the commercial property market forward.
Jan. 6, 2025
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