Economy & Finance
Malaysia’s central bank left its overnight rate unchanged at 3.00% in May, while cutting banks’ reserve requirement ratio from 2% to 1% to inject liquidity. Bank Negara warned that U.S.-China trade frictions could weigh on growth, signaling room for rate cuts later in 2025. Meanwhile, approved capital investments remained robust: in Q1 2025, total approved projects rose 3.7% year-on-year to RM89.8 billion (US$21.2 b). Foreign capital made up roughly two-thirds of this total (RM60.4 b), led by Singapore (RM28.3 b), the U.S. (RM9.9 b), and China (RM7.9 b). The bulk of the investment was in the services sector (RM57.8 b), reflecting ongoing development in finance, logistics, and utilities. These figures suggest continued confidence in Malaysia’s economy, even as policymakers brace for external headwinds.
Technology & Digital Economy
US tech giant Google is expanding its footprint in Malaysia. In June, Investment Minister Tengku Zafrul highlighted Google’s plan to spend RM9.4 billion to build its first data centre and cloud region in Malaysia. The government estimates this project will generate RM15.04 billion in long-term economic impact and create about 26,500 jobs by 2030. Officials say Kuala Lumpur will fully support Google’s AI and cloud initiatives, aiming to boost local capacities in artificial intelligence, cloud computing, and cybersecurity. This reflects Malaysia’s strategy to become a regional hub for high-value digital services, building on the growing demand for data and AI-driven solutions.
Energy & Resources
Malaysia’s energy sector saw major developments in June. ENI (Italy) and national oil firm Petronas signed a framework on June 17 to pool selected upstream oil and gas assets from Malaysia and Indonesia into a new 50/50 joint venture. Under the deal (pending final agreements in late 2025), each side will contribute assets valued to give 50:50 ownership. The venture is expected to have a combined portfolio exceeding 50 trillion cubic feet of gas, strengthening regional production and infrastructure. At the same forum, Petronas also launched a new Energy Transition Academy on June 16 – a training institute to upskill the workforce for the low-carbon energy industry. This initiative is part of Malaysia’s broader strategy to balance energy security with sustainability as it shifts toward renewables and hydrogen.
At the regional Energy Asia 2025 conference (Kuala Lumpur, June 16–18), Prime Minister Anwar Ibrahim emphasized Malaysia’s commitment to clean energy. He announced plans to invest about RM43 billion (~US$10.1 billion) in modernizing the power grid with smart technologies (including AI and battery storage). The government also highlighted climate initiatives: Malaysia has passed a Carbon Capture, Utilisation and Storage (CCUS) Act in 2025 to provide a legal framework for large-scale CO₂ sequestration. These announcements were framed in the context of ASEAN-wide climate goals (an ASEAN CCS roadmap) and ASEAN nations’ net-zero commitments. In sum, Malaysia is signaling stronger action on energy transition, blending traditional oil and gas collaboration with investments in renewables and decarbonization.
Manufacturing & Industry
Malaysia’s industrial sector has gained strength. The country jumped 11 places to rank 23rd in the 2025 IMD World Competitiveness Index, its best showing since 2020. The Federation of Malaysian Manufacturers (FMM) credited this leap to recent reforms and restored investor confidence, but cautioned that Malaysia must now move beyond an input-driven model. FMM leaders urged a sharper focus on productivity, technology, and R&D, along with support for high-value innovation and local startups, to sustain competitiveness. In line with this, the government is rolling out new incentives for advanced manufacturing. In particular, Trade Minister Tengku Zafrul announced that details of a support package for the domestic semiconductor industry will be unveiled in July. Malaysia already accounts for about 13% of global semiconductor testing and packaging (hosting investments by Intel, Infineon, and others), and the upcoming incentives aim to secure these high-tech jobs and attract further chipmaking projects.
Trade & International Relations
International trade developments were front-page news in June. Malaysia continued high-level talks with the United States to avert a planned 24% tariff on Malaysian exports (the tariff is paused until a July 8 deadline). Investment Minister Tengku Zafrul reported that meetings in Washington (June 18–20) with U.S. trade and commerce officials have “progressed well,” and both sides agreed to intensify negotiations to reach a mutually acceptable deal before the suspension expires. Success here is seen as vital to protect Malaysian businesses – U.S. demand has been strong, with eight consecutive months of double-digit export growth to America. The U.S. remains one of Malaysia’s top three export markets, especially for electrical & electronics goods, semiconductors, medical devices, and machinery. Besides the U.S., Malaysia is also nurturing ties across the region; for example, reforms under the Regional Comprehensive Economic Partnership (RCEP) and potential ASEAN free trade expansions could open new markets. Overall, Malaysia is balancing trade diplomacy and supply-chain resilience to navigate global volatility.
Startups & Innovation
Malaysia’s startup ecosystem continues to receive strong backing. Budget 2025 earmarked RM1 billion for a new Dana Perintis startup fund under the pension fund KWAP (with RM200 million disbursed in 2025) and RM65 million for the Cradle startup incubator, aiming to catalyze local venture growth. A National Fund-of-Funds under state investor Khazanah was also launched with RM1 billion (RM300m provided in 2025) to support venture capital financing. These financing measures are complemented by a lively innovation community: for instance, Nexea’s DisruptInvest Summit (scheduled June 26) will unite over 1,000 entrepreneurs, investors, and corporate leaders to share trends in tech and venture funding. Community events also abound – local gatherings like the BBX Connect Day (May 2025) brought founders and mentors together for pitching and deal-making. In short, government grants and public-private programs are fueling momentum in Malaysia’s digital and entrepreneurship sectors, signaling confidence in future growth.
Sources: Authoritative news and industry reports (Bernama, Reuters, The Star, Digital News Asia, PETRONAS press releases, etc.)
