KUALA LUMPUR — Malaysia’s headline inflation remained unchanged at 1.4% in April, while core inflation edged up to 2% from 1.9% in March, according to Bank Negara Malaysia (BNM).
In its Monthly Highlights for April, the central bank said the rise in core inflation was driven by price increases in core components, including mobile communication services, jewellery and watches, as well as air passenger transport.
“These were partially offset by lower inflation for non-core items such as fuels and lubricants, as well as fresh vegetables, amid an easing cost environment,” it said.
BNM also reported that gross exports grew by 16.4% from 6.8% last month, mainly due to the continued strong expansion of electrical and electronics (E&E) exports, supported by a rebound in non-E&E and commodities exports.
“Malaysia imports expanded by 20% (March 2025: -2.9%), amid a sharp growth of capital imports. However, intensified trade tensions are expected to weigh on exports and increase downside risks.
“This will be partly cushioned by sustained global demand for E&E and Malaysia’s integral role in the global supply chain,” said BNM.
The central bank noted that credit to the private non-financial sector grew by 5.5% (March 2025: 5.5%), supported by steady growth in outstanding loans (5.5%; March 2025: 5.6%) and higher growth in outstanding corporate bonds (5.5%; March 2025: 5.3%).
“Growth in business loans moderated slightly to 4.6% (March 2025: 4.8%), reflecting slower loan growth, particularly in the services sector.
“Notwithstanding, demand for business financing remained forthcoming across both small and medium enterprises (SMEs) and non-SMEs. Household loan growth remained steady at six per cent with continued growth across most loan purposes,” it noted.
BNM highlighted that the global financial conditions became more volatile following tariffs announcement by the United States (US) administration.
“Global investor sentiment also turned cautious amid rising concerns over a more subdued US economy and its negative spillovers to the global economy. Amid these developments, the ringgit appreciated by 2.7% against the US dollar.
“The FTSE Bursa Malaysia KLCI rose by 1.8% (regional average: 1.1%), while the yield on 10-year Malaysian Government Securities (MGS) declined by 11.0 basis points (regional average: -14.7 bps), in line with movements of global bond yields.
“This trend was largely driven by net foreign inflows into the bond market, amid heightened global risk aversion,” it noted.
Additionally, it said the banking system continued to show healthy liquidity buffers, with an aggregate liquidity coverage ratio of 155.8% (March 2025 to 151.6%).
“The aggregate loan-to-fund ratio decreased slightly to 83.3% (March 2025: 83.8%) as the increase in total funds outpaced loan growth,” said BNM.
Malaysia’s gross and net impaired loans ratios remained stable at 1.4% and 0.9%, respectively.
“The loan loss coverage ratio (including regulatory reserves) remained prudent at 131.0% of gross impaired loans, compared to 131.3% in the previous month,” it added. — May 30, 2025