KUALA LUMPUR, Aug. 18 (Xinhua) -- Economists have held mixed views on Malaysia's growth outlook after the country recorded lackluster growth in the second quarter.

Given persistent tariff risks, geopolitical tensions, and the ongoing implementation of the domestic fiscal reform agenda, UOB Global Economics and Markets Research has maintained a cautious outlook for Malaysia's economic growth in the second half of 2025 and into 2026.

"We project Malaysia's gross domestic product (GDP) growth to moderate to 3.6 percent in the second half, bringing full-year growth to 4 percent in 2025," the research house said in a recent note.

For 2026, it noted that the growth is projected to improve gradually to 4.5 percent after taking into account several positive factors and the expectation of another 25 basis points cut in the overnight policy rate to 2.5 percent by the end of the fourth quarter of 2025 that is aimed at reinforcing the growth momentum in 2026.

Meanwhile, ANZ Research has maintained Malaysia's 2025 GDP growth forecast at 4.1 percent.

According to the research house, Malaysia's final second-quarter GDP growth remained lackluster, as robust investment activity and resilient domestic consumption were offset by a sharp deterioration in net exports.

"The country's external demand is expected to weaken further, but overall growth should remain supported by resilience in domestic demand, particularly sustained momentum in investment," it noted.

MBSB Research, however, has adjusted Malaysia's 2025 GDP growth projection to 4.3 percent from 4 percent previously.

"Although the second quarter GDP is slightly lower than the advance estimate, the first half growth is still better than our earlier estimate," the research house said in a note last Friday.

While commodity exports have declined, it noted external trade has shown greater resilience than previously anticipated due to front-loading effects and an improvement in re-exports.

The Malaysian economy expanded 4.4 percent in the second quarter of 2025, driven by robust domestic demand. ■