Recent data suggest Malaysia's economy had a better start to 2025 after a soft end to 2024. We have upgraded our 2025 growth forecast by 0.4ppts to 4.1%, following a 5.1% expansion in 2024. But shifting base effects mask slightly stronger momentum over this year. Alongside growing inflationary risks, this means Bank Negara Malaysia is unlikely to tweak its policy rate this year.
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