Industrial production rose 0.3% year-on-year in May, according to the statistics department, the slowest pace since end-2023.

That compares with the median estimate of 2.1% growth in a Bloomberg survey.

Manufacturing growth slowed to 2.8% and a recent contraction in the mining sector widened to 10.2%, weighing on the nation’s industrial output, according to the department.

Overall, industrial production in the first five months of the year expanded at a slower pace of 2%, compared with 3.4% in the same period in 2024, Chief Statistician Uzir Mahidin said in a statement.

“The print is poor, and it highlights the growth risks ahead,” said Lavanya Venkateswaran, an economist at Oversea-Chinese Banking Corp (OCBC).

OCBC recently lowered its 2025 gross domestic product forecast to 3.9%, from 4.3%, she added.

Bank Negara Malaysia will this month revise its growth forecast for the year from its original projection of 4.5%-5.5%, as US president Donald Trump threatened to impose steeper tariffs on the trade-reliant nation in August.

On Wednesday, the central bank cut its key interest rate by 25 basis points for the first time since 2020 in a pre-emptive move to preserve growth, which has moderated for three straight quarters.

“Sharply weaker data in the coming months could give BNM reason enough to deliver consecutive cuts,” with another potential easing in either September or November, Venkateswaran said.