Stable economy in 2025 a comfort for Malaysians, says analyst

The previous 12-month period is one defined by steadiness, highly prized by households, investors and policymakers, Samirul Ariff Othman says.

Samirul Ariff Othman, an economic and geopolitics analyst, says the ringgit’s recovery is a sign that investors viewed Malaysia as broadly predictable despite ongoing political and reform debates. (Envato Elements pic)

PETALING JAYA:

 On the economic front, Malaysians will bid farewell to 2025 with a huge sigh of relief.

In a year when global uncertainty was intensifying, sending fears of economic repercussions for the country, somehow Malaysia avoided major shocks, economist Samirul Ariff Othman said.

Malaysia’s economics story for 2025 may not have been one of exuberance, but neither was it one of distress, the adjunct lecturer at Universiti Teknologi Petronas told FMT.

“It quietly delivered something many households and investors value — stability,” he added.

“It was a year defined by steadiness, a quality often undervalued in public debate but highly prized by households, investors and policymakers alike”.

Samirul Ariff Othman.

Samirul said the economy’s performance should be understood not through headline growth figures alone, but through how ordinary Malaysians experienced daily life, from savings returns and job security to prices and borrowing costs.

“For most Malaysians, the economy is not experienced through GDP charts or policy communiqués,” he said. “It is felt through tangible signals that shape household decisions and confidence.”

One such signal, Samirul noted, was the Amanah Saham Bumiputera dividend. ASB declared a payout of 5.75 sen per unit in 2025, amounting to more than RM10 billion distributed to unit holders.

“It did not signal boom times,” he said, “but it reassured millions that a core savings vehicle remained intact and dependable.”

Samirul, who is an economic and geopolitics analyst, noted that in a year marked by geopolitical tensions, uneven global growth and market volatility, continuity mattered more than excitement.

He argued that for households relying on ASB for retirement and long-term savings, predictability was itself a form of economic security.

The ringgit’s performance reinforced that sense of cautious stability. After years of weakness, the currency strengthened during the year and emerged as one of the better-performing currencies in the region.

“For households, this meant some relief from imported price pressures, especially for essentials and medicines,” Samirul said. “For policymakers, the importance lay less in the speed of appreciation than in its orderly character.”

He added that the ringgit’s recovery reflected improving confidence rather than speculative flows, a sign that investors viewed Malaysia as broadly predictable despite ongoing political and reform debates.

Monetary policy also played a stabilising role. Bank Negara Malaysia kept the overnight policy rate at 2.75%, balancing growth support with price stability. Inflation remained moderate, while unemployment hovered around 3%, levels consistent with an economy still generating jobs.

“For many families, the lived reality was mixed,” Samirul said. “Expenses remained tight and aspirations constrained, but the macroeconomic backdrop did not point to dislocation or crisis.”

Equity markets, he said, mirrored that unevenness. Large-cap stocks proved relatively resilient, supported by balance sheet strength and defensive earnings, while mid- and small-cap stocks struggled amid tighter financial conditions.

“This divergence underscored a broader theme of 2025,” he said. “Risk-taking was not indiscriminately rewarded, but neither was it indiscriminately punished.”

Beyond what the public could see, Samirul pointed to sustained investment flows as one of the most important anchors of growth. Malaysia continued to attract commitments in semiconductors, data centres, digital infrastructure and energy transition projects.

“These investments are not driven by short-term sentiment or political theatre,” he said. “They respond to policy continuity, institutional functionality and confidence that a country will remain investable over the long term.”

According to Samirul, Malaysia’s key achievement in 2025 was avoiding unforced errors at a time when many economies were struggling with policy volatility and investor flight.

“It was not a year of dramatic economic transformation,” he said. “It was a year in which Malaysia stayed relevant and broadly predictable.”

He argued that in an era shaped by artificial intelligence, shifting supply chains and geopolitical risk, steadiness itself had become a strategic asset.

“In uncertain times, steadiness is not a weakness,” Samirul said. “It is a form of protection.”

As Malaysia looks ahead, he cautioned that stability alone will not be enough to meet rising public expectations, particularly on wages and living costs. But he stressed that without stability, progress becomes far harder to sustain.

“For households, investors and policymakers alike,” he said, “2025 showed that calm can matter just as much as growth. - FMT