Economy

MALAYSIA’S government plans to do a cost-benefit analysis of its controversial trade agreement with the US, while warning lawmakers they should keep the accord despite concerns it may hurt the country.

The review, pending the deal’s ratification, could take six to 12 months and will focus on the impact on Malaysia’s exports and trade surplus, according to Investment, Trade and Industry Minister Johari Abdul Ghani. He was speaking a day after US President Donald Trump vowed to hike tariffs on goods from South Korea to 25%, citing what he said was the failure of lawmakers in Seoul to codify their trade deal.

“Malaysia has not yet received any official notice or notification from the US regarding the timeline for ratifying ART,” Johari told parliament on Tuesday, referring to the trade agreement by its acronym. “Hence, the government is currently reviewing ART’s contents to ensure that the country’s economic interests are safeguarded and to reduce the risks to the country’s trade.”

However, terminating the deal altogether would spark economic uncertainty and instability, he added.

The trade agreement Prime Minister Anwar Ibrahim signed with Trump last year fueled concerns it could infringe upon Malaysia’s sovereignty. The trade ministry in November published an FAQ to address the worries, a month before Johari took over the portfolio.

Trump set a 19% tariff on Malaysia in August last year, in line with that imposed on most other Southeast Asian economies and lower than the 25% he earlier threatened. While gross domestic product expanded 4.9% last year, the government expects a slowdown to a range of 4%-4.5% this year amid heightened global volatility.

“Particular focus will be given to the impact of the country’s exports to the United States worth 233.1 billion ringgit ($59 billion) and its trade surplus worth 98.7 billion ringgit,” Johari said of the cost-benefit review. –BLOOMBERG

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NEGERI Sembilan is emerging as a new hotspot for data centre (DC) developments, presenting growth opportunities for local construction companies, according to RHB Research.

The research house maintains an OVERWEIGHT rating on the construction sector, highlighting Gamuda Bhd, Kerjaya Prospek Group Bhd, and Sunway Construction Group Bhd as top picks.

Analysts cite field visits to Nilai Impian, where a DC-related project has made commendable progress, as evidence that the state could be a focus area alongside Cyberjaya and Johor.

“These and other similar observations indicate that Negeri Sembilan could be the next focus area for DC developments,” RHB noted.

Negeri Sembilan will see two DC projects, namely a green DC in Nilai, reportedly handled by Japan-based Kajima, and a AI technology DC in Springhill, Port Dickson, with enabling works underway on a 389-acre site managed by Gamuda.

Kajima was awarded a RM610 million contract in June 2025 for main building works on a DC, potentially corresponding to the Nilai project observed by RHB.

Springhill’s enabling works cost RM1 billion, with a full-scale water treatment plant of 65MLD planned to support the DC and surrounding residential areas.

Assuming the Nilai DC has a capacity of 30MW, it would require about 2.1 million litres of water per day (MLD). Negeri Sembilan’s 1,050MLD supply capacity with a 16.2% reserve margin is sufficient to meet this demand without strain.

The state is also expected to attract RM20 billion from Australia to develop an AI DC in the Negeri Sembilan Semiconductor Valley, with the first phase costing MYR10 billion, according to Chief Minister Datuk Seri Utama Aminuddin Harun (picture).

RHB noted potential challenges for contractors: heightened competition from foreign firms and unexpected slowdowns in DC investment flows.

Despite these risks, Negeri Sembilan’s growing DC ecosystem is expected to drive sustained opportunities for construction companies, particularly those experienced in large-scale industrial projects. — TMR

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PUTRAJAYA — The median monthly wage of Malaysia’s 7.06 million formal employees increased to RM2,864 in September 2025, up 4.3 per cent from RM2,745 a year earlier, according to the Third Quarter 2025 Employee Wages Statistics (Formal Sector) Report released by the Department of Statistics Malaysia (DOSM) today.

DOSM in a statement today said the rise in wages was accompanied by steady employment growth, with the number of formal employees expanding 3.5 per cent year-on-year in July, August and September 2025, reflecting continued resilience in the formal labour market through the third quarter 2025.  

By sex, male employees who made up 55.1 per cent or 3.89 million of total formal workers, earned a higher median monthly wage of RM2,900 compared with RM2,800 for female employees who accounted for 44.9 per cent or 3.17 million persons.

Wage data by age group showed employees aged 45 to 49 continued to record the highest median monthly wage at RM3,800 across all three months of the third quarter. 

“The highest growth was recorded among employees aged below 20 years, with the median monthly wage reaching RM1,700 in September 2025, an increase of  13.3 per cent compared with the same period of the previous year,” the statement read. 

According to DOSM, all economic sectors posted higher median wages during the quarter.

It said that although representing just 0.6 per cent of formal employment, the mining and quarrying sector continued to record the highest median monthly wage at RM6,600, up by 11.9 per cent year-on-year, while the Agriculture sector, comprising 1.8 per cent of citizen formal employees, recorded the lowest median wage at RM2,245.

By state, DOSM said Kuala Lumpur recorded the highest median monthly wage at RM4,064, followed by Selangor at RM3,127 and Penang at RM2,927, while the lowest medians were recorded in Kelantan and Perlis at RM1,800 and in Sabah and Kedah at RM2,000.

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin was quoted as saying that 8.8 per cent of formal employees earned below RM1,700 per month in September 2025, down by 13.5 percentage points from the previous year. 

“Furthermore, percentile analysis revealed that the bottom 10 per cent of Malaysian formal employees received monthly wages of RM1,700 or less, while employees in the 90th percentile earned at least RM9,000 per month.

“This disparity illustrates that employees in the 90th percentile earned five times more than those in the lowest wage group, underscoring the prevailing wage gap between the highest and lowest earners,” he said. — BERNAMA

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by NURNABIHAH DINI 

THE government is conducting a comprehensive cost-benefit analysis (CBA) on Malaysia’s Agreement on Reciprocal Trade (ART) with the US. 

Investment, Trade and Industry (MITI) Minister Datuk Seri Johari Abdul Ghani said a full CBA typically takes between six and 12 months to complete, noting that the ART differs from conventional trade agreements as it is unilateral in nature. 

He explained that negotiations with the US began after Washington imposed a high reciprocal tariff of 24% on Malaysian goods on April 2, 2025.

Johari said Malaysia was later informed in July 2025 of a possible increase in the tariff to 25%, before a series of negotiations led by MITI successfully reduced the tariff to 19% from Aug 1, 2025.

“Continued uncertainty over tariff rates could undermine investor confidence, potentially prompting foreign investors to relocate operations to countries with lower tariffs,” he told the Dewan Rakyat today.

Such a scenario, he said, would not only affect multinational companies operating in Malaysia but also local small and medium enterprises that supply goods and services to them, leading to job losses and reduced household incomes.

Johari added that MITI, together with its agencies including the Malaysia External Trade Development Corporation (Matrade) and the Malaysian Investment Development Authority (Mida), with support from MIDF Research, is carrying out the CBA with particular focus on Malaysia’s exports to the US, valued at RM233.1 billion, and the country’s trade surplus of RM98.7 billion with the US.

On whether the government could renegotiate or terminate the ART, Johari said Malaysia has yet to receive any official notification from the US on the timeline for ratifying the agreement. 

As such, the government is still reviewing the substance of the ART to ensure national economic interests are safeguarded and risks to trade are minimised.

He cautioned that terminating the agreement could create economic uncertainty, as the imposition of unilateral tariffs remains a prerogative of the US, potentially leading to a more unstable trade environment for Malaysia.

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KUALA LUMPUR — Malaysia had 42.2 million visitors in 2025, an 11.2 per cent increase compared to the 38 million in 2024 and 20.4 per cent higher compared to the 35 million in 2019, thus establishing a solid foundation for a successful Visit Malaysia 2026 (VM2026) campaign.

Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said the positive performance reflected the continued momentum of the country’s tourism industry as the main driver of its economic growth.

To ensure this momentum can be maintained, he said the government will strengthen coordination across all ministries and agencies ahead of VM2026 implementation.

“The government is strengthening coordination across all ministries and agencies to ensure the tourism industry remains the main driver of the country’s economic growth,” he said.

Ahmad Zahid said this was decided at the Tourism and Culture Cabinet Committee (JKPK) Meeting, which involved various ministries, departments and main agencies in line with the whole-of-government approach. 

He said the meeting also emphasised the strategic importance of the tourism industry to national development, particularly in terms of its contribution to the Gross Domestic Product (GDP), creation of job opportunities and the strengthening of the country’s fiscal position.

“As such, the whole government machinery is urged to move in tandem and in an integrated manner to attract more international visitors, extend their stay and increase tourist spending in Malaysia,” he said.

Ahmad Zahid said that in conjunction with VM2026 as the key national agenda, the close cooperation of state governments, the private sector and industry players with the Ministry of Tourism, Arts and Culture (MOTAC), as the lead agency, is crucial to accelerating industrial development and increasing competitiveness.

“This strategic collaboration is vital to ensuring issues related to jurisdiction, regulation and enforcement can be effectively and promptly addressed,” he said.

He said the meeting also discussed several key policy issues that have direct implications on the tourism industry, including the Malaysia My Second Home (MM2H) Programme, the Premium Visa Programme (PVIP), the proposed takeover of tourism vehicle regulation, the status of the Umrah transit hub and the development of cruise ship tourism. 

“Overall, this meeting reflects the Federal Government’s ongoing commitment to strengthen cooperation among ministries, departments and agencies to ensure every tourism-related issue is comprehensively addressed.

“All parties remain committed to ensuring the success of the VM2026 campaign so that the stipulated targets and economic impact can be attained,” he said. — BERNAMA

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KUCHING — Outgoing United States Ambassador to Malaysia Edgard D. Kagan has expressed confidence that Sarawak will continue to attract greater interest and investment from American companies following sustained efforts to promote the state as a viable business destination.

At a media engagement programme here today, he said that while US firms would ultimately make their own investment decisions, Sarawak was increasingly being recognised as a location with strong potential.

“I’ve told every American company with whom I engage, who are looking at Malaysia, that they should look at Sarawak. But I think that we’ve helped put Sarawak on the map for American businesses, working with our friends at the American Chambers of Commerce, at the US-ASEAN Business Council, and with the Malaysian government as well as the Sarawak state government.

“Over time, you’re going to see greater investment by American firms here,” said the ambassador, who will be leaving the country next month as his tenure comes to an end.

Kagan said at present, US business interest in Sarawak had been largely concentrated in the energy sector, alongside manufacturing activities such as the Western Digital plant in the electrical and electronics (E&E) industry.

He believed this focus would broaden as Sarawak’s economy continued to grow and diversify, and expected that a wider range of companies from the US would come in.

The ambassador also highlighted Sarawak’s strong potential in the energy sector, particularly in renewable energy, noting that opportunities extended beyond power generation to include energy transmission and management.

“It is noticeable that Sarawak’s energy capacity, along with its access to electricity and water, positions the state well to attract data centres.

“Beyond infrastructure, Sarawak’s greatest asset is its people and talent, which I believe will continue to make the state an attractive destination for foreign investment, including from American companies,” he added. — BERNAMA

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OCBC Group Research expects Malaysia’s economic growth to moderate to 3.8% year-on-year in 2026 from an estimated 4.8% in 2025, as the boost from front-loaded exports to the US fades and investment spending slows modestly.

“For Malaysia, we maintain our conservative 2026 GDP growth forecast of 3.8% y-o-y compared to 4.8% in 2025,” said OCBC chief economist and head of group research Selena Ling in the bank’s 2026 economic outlook.

The bank expects growth to ease gradually to 3.9% in the first half of 2026 and 3.8% in the second half.

OCBC said the moderation reflects “payback from front loading exports to the US through 2025” and more volatile export growth, particularly to the US, as tariff exemptions are clarified and the need to rush shipments diminishes.

It forecasts Malaysia’s goods export growth to slow to 2.2% in 2026 from 6.5% in 2025.

That said, the bank noted potential upside risks if momentum from the AI- and data-centre boom, which “has turbo-charged growth in 2025”, continues this year.

Johor, in particular, is expected to remain a key beneficiary of data-centre investments, supported by initiatives such as the Johor-Singapore Special Economic Zone.

On policy, OCBC expects fiscal support to remain targeted as the government presses ahead with consolidation, leaving room for monetary easing.

“We remain comfortable with our call for a 25bp rate cut from Bank Negara Malaysia in 1H26,” Ling said, though she cautioned that resilient growth could reduce the need for a cut.

On the currency, OCBC sees the ringgit’s outperformance against the US dollar in 2025 spilling into 2026, albeit with more modest gains.

The bank noted that constructive policymaker messaging, including earlier comments that the ringgit could trade “just below 4” against the US dollar by mid-2026, has helped to underpin positive sentiment, alongside support from the US Federal Reserve’s easing cycle, a steadier renminbi, and encouraging domestic fundamentals such as quality foreign direct investment inflows, a wider trade surplus and commitment to fiscal consolidation.

Looking beyond 2026, OCBC said structural reforms and progress on economic masterplans could lift Malaysia’s growth to 4.0%–4.5% in 2027–28, underpinned by resilient FDI and continued investor confidence. — TMR

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SHAH ALAM — The Selangor government recorded state revenue collection of RM3.021 billion in 2025, thus recording a consistent increase for five consecutive years, said Selangor Menteri Besar Datuk Seri Amirudin Shari (picture).

He said the historic achievement of surpassing the RM3 billion mark reflected the state’s strong and consistent financial performance, the results of effective governance and the high commitment of the entire state government administration machinery.

“This consistency achieved through revenue collection was the result of hard work, employees who work hard and also the creativity of the state government administration in obtaining new results for the state government,” he said when delivering his New Year’s Address at the Raja Muda Musa Hall, Selangor Youth and Culture Complex here today.

Amirudin added that in 2021, Selangor targeted an income of RM2.2 billion but managed to record a collection of RM2.28 billion and that momentum continued in 2022 when the target of RM2.05 billion was exceeded with a collection of RM2.53 billion, which was more than RM500 million over the target.

According to him, the performance continued in 2024 when the target of RM2.2 billion was successfully achieved with a collection of RM2.867 billion, while in 2025 the target of RM2.3 billion was recorded with a surplus of almost RM700 million, reaching RM3.021 billion.

However, 2023 revenue collection was not mentioned.

He also expressed his appreciation to the entire state administrative machinery including the Land and Mines Office (PTGS) and local authorities for successfully maintaining strong revenue collection performance.

Amirudin said Selangor continued to record encouraging investment performance as the state recorded total investments exceeding RM51 billion as at September 2025, among the highest in Malaysia.

He said although some states recorded large amounts of investments, Selangor remained the state that created the most job opportunities, thus proving the quality of the investments received.

“We do not only look at the amount of investments coming in, but also the number of job opportunities created, because up to September 2025, the investments recorded in Selangor have created almost 44,000 job opportunities, the highest compared to other states.

“The number is 43,998, compared to Kuala Lumpur’s 43,900, Penang’s 19,700 and Johor’s 14,492… this means that our investments are not just poor quality investments, we are not only absorbing and protecting those in need, but we are providing opportunities and creating life opportunities for the people living in this state,” he said.

Meanwhile, to identify the hardcore poor, Amirudin said the state government would monitor about 3,500 individuals every six months, including those facing job loss, health problems or income issues, with the involvement of relevant agencies such as the Social Welfare Department and zakat, to ensure that these groups continue to be assisted. — BERNAMA

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GEORGE TOWN — The Penang state government has announced that it has yet to make any decisions, including on zoning and location, for the proposed establishment of the Penang International Financial Centre (PIFC), despite ongoing discussions with key regulators.

Chief Minister Chow Kon Yeow (picture) said in a statement today that discussions with Bank Negara Malaysia, the Securities Commission Malaysia, and the Labuan Financial Services Authority (LFSA) aim to ensure that any proposal put forward is innovative, legally compliant, upholds high integrity, and is aligned with the national Financial Sector Blueprint.

He said the effort is also crucial to avoid any overlap with existing value chains within the country’s financial sector.

“Positioning Penang as a financial hub is a long-term aspiration to strengthen the state’s economic foundations within a broader framework, namely to develop Penang into a competitive and high-impact regional technology innovation hub.

“Although the federal government has yet to finalise a comprehensive framework for this initiative, the state government, through its think tank Penang Institute, remains committed to laying a strong foundation,” said Chow.

He also said engagement sessions with potential industry players will continue in phases and stages to build market confidence and assess the industry’s actual needs.

“Penang has unique strengths through its long-established ecosystem of high-technology industrial and manufacturing activities.

“As such, the state will focus on specialised financial segments such as digital assets, financial technology (fintech) and manufacturing-related financial services, including supply chain financing, trade, risk management and industrial innovation, as part of the direction for the establishment of the PIFC,” said Chow. — BERNAMA

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by AKMAR ANNUAR

SELANGOR is targeting 10,000 visitors as it ushers in the Year of the Horse at Taman Rekreasi Wawasan, Puchong, on Feb 7, 2026, from 5pm to 10pm. 

The state government will host the event with Invest Selangor Bhd and Majlis Bandaraya Subang Jaya (MBSJ).

State Executive Councillor for Investment, Trade and Mobility Ng Sze Han (picture) said the close cooperation between the Selangor state government, Invest Selangor and MBSJ in organising this event proves their commitment to ensure economic development and social harmony move in tandem.

The state is staging the celebration ahead of Chinese New Year which falls on Feb 17 to avoid overlap with the start of Ramadhan and to keep the programme accessible to all communities.

Puchong was chosen to bring festivities closer to residents, rather than concentrating major celebrations in traditional city-centre locations, as the state pushes for community-level engagement across districts.

A key feature this year is the introduction of the “Campur Beras” tradition, positioned as a unity symbol that replaces the customary yee sang toss ceremony at the official table.

Organisers said the concept centres on community participation through rice contributions and redistribution, carrying the idea of shared blessings and strengthening unity among Selangorians of different backgrounds.

Members of the public are encouraged to send rice contributions to their local community service centres on or before Feb 3, 2026, as part of the programme’s “sharing prosperity” theme.

The performance line-up begins with pre-show segments from 5.45pm to 6.45pm, featuring an orchestra set blending Chinese cultural music and Chinese New Year medleys, alongside a mix of dance and music items including “Jom mamak”, percussion, Chinese dance “Bunga”, street dance and a live band.

The main show runs from 8.30pm to 9.35pm, opening with a dance titled “The Herd of Synergy”, followed by a brass band segment, a puppet-and-dance performance themed “Dunia Bawah Air”, a diabolo showcase, a lion dance performance and a choir segment.

Visitors will also be able to catch a light projection show around the park, with organisers saying projector technology will be used to create an illuminated experience across the recreation area.

For families, the programme includes the distribution of 1,500 angpau packets specifically for children aged 12 and below, alongside mandarin oranges for attendees.

Organisers will also hand out 5,000 small packets of rice as a special souvenir for visitors, tying back to the “Campur Beras” theme and the wider message of shared blessings.

Food service will be handled in two dinner sessions, with the first starting at 5.45pm for 3,000 visitors, and the second at 8.30pm for 2,000 visitors.

On tangible economic spillovers, Ng told The Malaysian Reserve (TMR) that the state’s focus is to ensure benefits reach all levels of society, saying beyond engaging a hotel caterer, organisers are also working with regular traders through the programme platform to give them space to do business during the event.

Ng added that the priority is participation and inclusivity, bringing the event forward allows wider attendance across communities, including non-Chinese residents and Muslim communities ahead of Ramadhan.

“To me, this is the best return in the social economy, because everyone can get together,” he said.

Organisers advise visitors to use e-hailing services such as Grab, or rail services via the Light Rail Transit (LRT), with three stations identified as key access points, namely Pusat Bandar Puchong, Puchong Prima and Puchong Perdana.

Public transport options also include Bas Smart Selangor, while visitors can also use Selangor’s Demand-Responsive Transit (DRT) van service operated by Prasarana, with users able to check schedules and pick-up points via the “Rapid On Demand” app on the Apple App Store or Google Play Store.

Ng said parking details and nearby public parking locations will be announced once technical discussions are finalised, as organisers continue preparations for crowd flow and visitor comfort.

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