Economic Views

2025 Macroeconomic Outlook: Growth to sustain amid monetary easing and protectionism

Global economic growth is expected to sustain, given the continuation of monetary easing policies despite the heightened level of trade protectionism. Global growth will be supported by the US economy which appears resilient, outperforming earlier projections of recession and hard landing, largely due to a robust services sector. This sector, buoyed by job creation policies, …

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MARC Ratings: Crude palm oil price to average higher in 2025

The palm oil market continues to face significant uncertainties heading into 2025, with supply-side challenges exacerbated by adverse weather conditions and a slower pace of replanting. Palm oil prices in 2024 have remained elevated due to global supply constraints, driven by reduced exports from the largest palm oil producer, Indonesia, as well as recent adverse …

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MARC Ratings: Oil prices to moderate in 2025 on supply dynamics

The global crude oil market is grappling with multiple challenges, each exerting pressure on the near-term price trajectory. Despite OPEC+ production cuts, slow demand growth and diminishing geopolitical risk premiums have kept Brent oil prices below USD80 per barrel (bbl) since 3Q2024. Heading into 2025, oil prices are expected to be weaker compared to those …

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Budget 2025: Continuing the reform agenda

On October 18, 2024, the Malaysian government announced an allocation of RM421.0 billion for Budget 2025, marking a 3.3% increase from the previous year (2024: 1.5%). Of this amount, RM335.0 billion is designated for operating expenditure (2024: RM321.5 billion) while the allocation for development expenditure remains at RM86.0 billion (2024: RM86.0 billion). Budget 2025 underscores …

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Fiscal Sustainability (Part 3) – Surveillance of fiscal health beyond conventional measures

In the previous parts of this series pertaining to fiscal sustainability, we have discussed the country’s revenue, expenditures, and general balance sheet items. In this final part, we delve beyond traditional debt metrics to offer innovative insights into the country’s fiscal health. Fiscal sustainability is often benchmarked by debt-led indicators; however, this runs the risk …

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Fiscal Sustainability (Part 2): Malaysia’s pathway to a resilient balance sheet

This is a multi-part series of articles where we analyse the elements of fiscal sustainability through: i) government revenue and expenditures, ii) on– and off–government balance sheet items, and iii) innovative sustainability ratios. In this second part, we discuss the state of the country’s balance sheet. Government debts can generate positive multiplier effects when allocated …

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Fiscal Sustainability (Part 1): Building a robust tax base and containing expenditure

This is a multi-part series of articles where we analyse the elements of fiscal sustainability through: i) government revenue and expenditures, ii) on– and off–government balance sheet items, and iii) innovative sustainability ratios. In this first part, we discuss Malaysia’s fiscal health through taxes and expenditures. Fiscal sustainability enables governments to meet future public expenditure …

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Mid-Year Macroeconomic Outlook 2024: Stable global growth in a moderate easing cycle

Global economic growth is expected to sustain a moderate level in 2024. Growth forecasts for advanced European economies remain relatively stable despite lingering weaknesses. The strength of the US economy may moderate the pace of policy rate cuts, potentially leading to a less synchronised global monetary policy easing, compared to some central banks in Europe …

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