KUALA LUMPUR — Malaysian economic growth came in close to expectations in the second quarter, official data showed on Friday, though the central bank said the outlook was clouded by uncertainty arising from US tariffs.

Gross domestic product (GDP) grew 4.4% in the April-to-June period from a year earlier, data from Bank Negara Malaysia (BNM) and the Statistics department showed, matching the pace of the first quarter. That was slightly below a Reuters poll forecast of 4.5%, which was also the government’s advance estimate.

The economy grew 2.1% on a quarter-on-quarter seasonally adjusted basis, faster than 0.7% growth in the previous three months, the data showed.

BNM said growth was driven by robust household spending and positive labor market conditions, but forecasting was challenging amid the uncertainty from US tariffs.

“Growth could move in different directions… we are operating in a different environment where changes happen very quickly,” BNM Governor Abdul Rasheed Ghaffour told a press conference.

A 19% tariff on Malaysian exports to the United States took effect earlier this month, although some goods remain exempt pending a review of US laws.

Of particular concern to Malaysia is President Donald J. Trump’s flagging of a 100% tariff on semiconductor imports from companies that do not have a US manufacturing footprint or plans to establish one.

Malaysia, a major player in the global semiconductor supply chain, has warned that tariffs on its chip exports to the United States would have a significant impact on its economy.

Total export growth is expected to be moderate in the second half of 2025, though there would be support from demand for electrical and electronic goods and higher tourism, Abdul Rasheed said, adding that visitor arrivals had recovered to pre-pandemic conditions.

Last month, the central bank lowered its growth forecast for 2025 to a range of 4% to 4.8% from 4.5% to 5.5%, which Abdul Rasheed said was “broad enough” to cover different outcomes arising from the US tariffs.

The bank also cut interest rates for the first time in five years in July to “preemptively preserve” the export-oriented economy’s growth.

Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia, said the rate cut and a narrower fiscal deficit would give authorities some capacity to counter expected slower growth in the second half of the year.

He said the fiscal deficit was 4.2% of GDP in the first half, down from 5.5% of GDP in the same period in 2024.

“This would give them some flexibility to spend on areas relating to cash transfers program which can have an immediate impact on growth,” Mohd Afzanizam said. — Reuters

GENEVA — The collapse on Friday of a sixth round of United Nations (UN) talks aimed at curbing plastic output has dimmed hopes of tackling a key source of pollution and left many advocates of restrictions pessimistic about a global deal during the Donald J. Trump administration.

A three-year global push to reach a legally-binding treaty to curb plastic pollution choking the oceans and harming human health now appears adrift, participants said.

Many states and campaigners blamed the failure on oil-producers including the United States, which they said hardened long-held positions and urged others to reject caps on new plastic production that would have curbed output of polymers.

Debbra Cisneros, a negotiator for Panama, which supported a strong deal, told Reuters, the United States, the world’s number two plastics producer behind China, was less open than in previous rounds conducted under Joseph R. Biden’s administration.

“This time they were just not wanting anything. So it was hard, because we always had them against us in each of the important provisions,” she said at the end of the 11-day talks.

Anti-plastic campaigners saw little hope for a change in Washington’s position under President Trump, who in February signed an executive order encouraging consumers to buy plastic drinking straws.

“The mentality is different, and they want to extract more oil and gas out of the ground,” said Bjorn Beeler, International Coordinator at International Pollutants Elimination Network (IPEN), a global network of over 600 public interest non-governmental organizations.

The US State department did not immediately respond to a request for comment about its positions and its role in the talks. US delegate John Thompson declined to respond to questions from a Reuters reporter on the outcome.

A State department spokesperson previously said that each party should take measures according to its national context, while Washington has expressed concerns that the new rules could increase the costs of all plastic products. The Trump administration has also rolled back various US climate and environmental policies that it says place too many burdens on national industry.

Earlier this week, Washington also flexed its muscle in talks about another global environmental agreement when it threatened measures against states backing a proposal aimed at reducing shipping emissions.

For a coalition of some 100 countries seeking an ambitious deal in Geneva, production limits are essential.

Fiji’s delegate Sivendra Michael likened excluding this provision to “mopping the floor without turning off the tap.”

For each month of delays, the World Wildlife Fund (WWF) said nearly a million tons of plastic waste accumulates — some of which washes up on the beaches of island states.

‘CONSENSUS IS DEAD’
Some participants also blamed organizers, the International Negotiating Committee (INC), a UN-established body supported by the UN Environment Programme (UNEP).

A low point was a formal meeting an hour before the negotiations were set to conclude at midnight on Thursday which lasted less than a minute and was then adjourned until dawn, prompting laughter and jeering from delegates.

“Everyone was in shock as no one understood,” said Ana Rocha, Global Plastics Policy Director for environmental group GAIA. “It’s almost like they were playing with small children.”

France’s ecology minister Agnes Pannier-Runacher called proceedings “chaotic.”

Asked what went wrong, INC chair Luis Vayas Valdivieso blamed the rift between countries and called the negotiations complex. “But we have advanced and that’s important,” he said.

UN provisional rules require all states to agree — a constraint that some see as unworkable, especially under a US administration that is retreating from multilateralism.

“Consensus is dead. You cannot agree a deal where all the countries who produce and export plastics and oil can decide the terms of what the deal is going to be,” said IPEN’s Beeler.

Some delegates and campaigners suggested introducing voting to break the deadlock or even for the UN-led process to be abandoned altogether. The WWF and others called on ambitious states to pursue a separate deal, with the hope of getting plastics-producing nations onboard later.

Two draft deals emerged from the talks — one more ambitious than the other. Neither was adopted. It is unclear when the next meeting will take place, with states merely agreeing to reconvene at a later date.

One positive development was that top plastics producer China publicly acknowledged the need to address the full-life cycle of plastics, said David Azoulay, Managing Attorney of the Center for International Environmental Law’s Geneva Office. “This is new, and I think this opens an interesting door.” — Reuters