Malaysia’s GDP growth is expected to expand within the forecast of 4.9% in 2025 (2024: 5.2%). It is faced with uncertainties from global politics related to Trump 2.0 policies, however Malaysia’s economy remains to grow steadily. The growth is mainly influenced by investment upcycles and Budget 2025’s raise in wages and salaries, coupled with Bank Negara Malaysia (BNM) maintained the Overnight Policy Rate (OPR) at 3.0% in 2025. This was to balance the inflation caused by higher sales & service tax, fuel subsidy reduction, higher minimum wage and higher cost of foreign workers. The global economy is expected to slow down to 2.9% in 2025 (2024E: +3.2%) due to the continued slow growth in the United States, and China. Furthermore, despite the forecasted growth in Eurozone, United Kingdom, and Japan, it is still relatively underperforming. The growth of ASEAN-6 on the other hand, will remain resilient with the support of global electronics upcycle, increase in foreign direct investment, and the normalisation of post-pandemic tourism. The global electronics upcycle is likely due to the expected rise in sales of semiconductors around the world. Foreign companies are investing money in ASEAN countries to increase their data centres and supply chain for its favourable labour market condition. Domestic consumers also contribute to the growth of ASEAN countries through increased consumer spending because of the interest rate cuts, lower inflation rate, and income growth. There are also China’s stimulus measures, where China reintroduces imports from ASEAN countries. This is expected to improve trade and investment between the Johor-Singapore Special Economic Zone. 2025 is expected to execute the initiatives launched in mid-2023 of Malaysia which includes, the signing of JohorSingapore Special Economic Zone (JSSEZ) agreement. This will be followed by New Investment Incentive Framework (Q3 2025), which will introduce a new investment program to attract businesses and create job opportunities in high value industries. Malaysia’s equity market was driven by construction, utilities, and banking stocks in 2024, raising the KLCI to as high as 1,678 though now though in 2025, it has decreased to 1,600 range. The surge in data centres have increased the electricity demand, while strong GDP and investment growth drove bank stocks. The 2025 KLCI is targeted to be 1,740 levels by the end of 2025. Banks, OW consumer, healthcare, and construction (of data centres), oil & gas, and technology (software & EMS) are key factors in achieving this target. The equity market will be driven by 5 themes: trade diversification which benefits the semiconductor industry; energy and EV industries in Sabah, Kedah, and Perlis; banks, consumer, and tourism sectors (including REITs) supported by higher wages and tourism recovery; investment realisation of those from 2023; and GLC transformation with GEARUP initiatives to enhance corporate efficiency and investor confidence. Market Summary Report Economic Overview 16 AL-SALĀM REIT ANNUAL REPORT 2024
RkJQdWJsaXNoZXIy NDgzMzc=