KUALA LUMPUR: Bank Negara Malaysia’s Monetary Policy Committee (MPC) today decided to maintain the Overnight Policy Rate (OPR) at 2.75%, citing supportive economic conditions and stable inflation prospects.

The central bank noted that global growth in 2025 has turned out stronger than expected, driven by lower-than-anticipated tariffs, increased artificial intelligence (AI)-led technology spending and stronger fiscal support.

While the impact of tariffs could weigh on global growth in 2026, the overall outlook remains resilient, underpinned by sustained domestic demand, moderating inflation, robust technology investments, and supportive fiscal and monetary policies.

However, downside risks persist, including the potential for higher tariffs, escalating geopolitical tensions and heightened volatility in global financial markets. Concerns also remain over elevated asset valuations. On the upside, global growth could benefit from stronger technology spending, a milder impact from tariffs and pro-growth policies in major economies.

For Malaysia, economic growth in 2025 is expected to be around the upper end of the forecast range, with momentum projected to continue into 2026. Growth will be supported by resilient domestic demand, stable employment conditions, wage growth and income-related policy measures that are expected to sustain household spending.

Investment activity is anticipated to remain strong, driven by progress in multi-year public and private sector projects, the rollout of new smaller-scale public initiatives, high realisation of approved investments and the continued implementation of national master plans.

The external sector is expected to benefit from continued strength in electrical and electronics (E&E) exports and higher tourist spending.

Nevertheless, the growth outlook is subject to uncertainties, particularly from global developments. Downside risks include slower global trade and lower-than-expected commodity production, while upside potential could stem from stronger global growth, increased demand for E&E products and more robust tourism activity.

On inflation, headline and core inflation averaged 1.4% and 2.0%, respectively, in 2025. For 2026, headline inflation is expected to remain moderate amid easing global cost conditions and modest commodity prices.

Core inflation is projected to stay stable and close to its long-term average, reflecting continued economic expansion without excessive demand pressures.

At the current OPR level, the MPC said the monetary policy stance remains appropriate and supportive of economic growth while ensuring price stability. The committee will continue to monitor developments and assess risks to the outlook for domestic growth and inflation.