SERC executive director Lee Heng Guie said the revision factored in an expected slowdown in goods and services export growth to 3% in 2025, down from 8.55% in the fourth quarter of 2024.

“The potential for tariffs could disrupt supply chains and create uncertainty for many export-oriented businesses,” he told a media briefing session here today.

SERC’s forecast falls below Bank Negara Malaysia’s current estimate of 4.5-5.5% GDP growth for the year.

Lee added that weaker performance in other economic indicators also weighed on the forecast, including slower growth in private consumption (4.4%), private investment (10%), public investment (5.8%) and imports (3.9%).

Still, he maintained that Malaysia’s economy remained resilient as financial and labour market indicators “look good”.

Lee warned of potential downside risks from US investigations under Section 232 of its trade law into imports of pharmaceuticals and semiconductors.

On April 14, Reuters reported that the Trump administration is moving forward with investigations into pharmaceutical and semiconductor imports, aiming to justify tariffs on these industries.

The administration argues that heavy dependence on foreign sources for medicine and microchips poses a threat to national security.

In light of the 90-day pause by the US on the tariffs, Lee also urged the government to reassess policy changes such as the RON95 petrol subsidy rationalisation and a scheduled hike in electricity tariffs.

He said this is because rising operational costs are key concerns for Malaysian businesses, especially small and medium-sized enterprises.