KUALA LUMPUR – Malaysia’s economy is expected to grow between 4.5% and 5.5% in 2025, a forecast driven by strong domestic demand despite ongoing global uncertainties. Bank Negara Malaysia (BNM) Governor Abdul Rasheed Ghaffour, speaking at a press briefing in Kuala Lumpur on Tuesday, outlined the economic outlook based on the country’s current momentum and key macroeconomic indicators.
According to the central bank, domestic consumption and private sector investment will remain the key pillars supporting Malaysia’s economic expansion. While external demand is likely to be affected by international market volatility, trade disputes, and geopolitical developments, internal economic activity is expected to sustain a steady pace of growth. The forecast reflects a cautious yet optimistic approach, incorporating both downside and upside risks that may influence Malaysia’s economic trajectory in the coming year.
The governor noted that the projection was made with a conservative assessment of key variables, including income levels, energy prices, and global trade dynamics. With the international trade landscape facing heightened uncertainty, Malaysia’s export sector may experience more moderate growth. Rising geopolitical tensions and trade policy shifts, particularly in major economies, continue to pose challenges, affecting global supply chains and investor sentiment. Despite these headwinds, Malaysia’s economic fundamentals remain strong, underpinned by resilient consumer spending and strategic policy measures aimed at sustaining stability and growth.
The central bank also provided an outlook on inflation, estimating that headline inflation will range between 2.0% and 3.5% in 2025. This projection accounts for potential price pressures stemming from domestic policy adjustments, including subsidy rationalization and fiscal reforms. However, inflationary risks are expected to be contained, with stable global cost conditions and the absence of excessive domestic demand pressures helping to maintain price stability. The governor assured that BNM remains vigilant in monitoring inflationary trends and is prepared to implement necessary measures to manage price fluctuations effectively.
In 2024, Malaysia’s economy recorded a robust expansion of 5.1%, supported by strong private consumption, sustained investment flows, and an improving external sector. Inflation remained stable at 1.8%, reflecting a well-managed economic environment despite global challenges. All key sectors of the economy experienced growth, with notable contributions from manufacturing, services, and construction. These positive trends have provided a solid foundation for continued progress, reinforcing Malaysia’s ability to navigate uncertainties while maintaining a steady path toward economic resilience.
Looking ahead, Bank Negara Malaysia remains committed to ensuring a stable economic environment by adopting a proactive policy stance. With a clear focus on sustaining growth, managing inflation, and mitigating external risks, the central bank aims to support Malaysia’s long-term economic sustainability while fostering investor confidence in the country’s economic prospects.
