Kuala Lumpur – Malaysia’s economy registered a 4.4% growth in the first quarter of 2025, reflecting a resilient domestic demand environment and steady investment activity, even as the external trade outlook remained mixed.
Bank Negara Malaysia Governor Abdul Rasheed Ghaffour stated on Friday that household spending remained robust, supported by favorable labor market conditions and recent income-related policies, including the revised minimum wage and adjustments to civil servant pay. These factors contributed to a stable consumption backdrop, which continued to serve as a key growth driver.
Investment momentum also persisted in Q1, sustained by the realization of both ongoing and newly initiated projects. According to the central bank, this investment strength is indicative of continued confidence in Malaysia’s medium-term growth trajectory.
However, the external sector presented a contrasting picture. Export growth decelerated, primarily due to lower revenues from the mining sector. Weaker performance in oil and gas output contributed to this decline. Nonetheless, this was partially offset by gains in electronics, electricity-related exports, and a recovering tourism industry.
Compared to the previous quarter’s 4.9% expansion in Q4 2024, the Q1 2025 performance indicates a slight moderation. On a seasonally adjusted basis, the economy rebounded with a 0.7% quarterly growth after contracting 0.2% in the final quarter of 2024.
Governor Abdul also acknowledged growing uncertainties tied to rising geopolitical tensions and evolving global trade policies. “The fast-developing issues surrounding trade tariffs will likely shape the global outlook through the rest of the year,” he noted. He added that as an open and trade-reliant economy, Malaysia remains susceptible to both direct and indirect spillovers from such developments.
As a result, Malaysia’s full-year GDP forecast of 4.5% to 5.5% may be revised downward, pending greater clarity on external variables. The central bank plans to release updated projections once visibility improves on key global risk factors.
Despite these external risks, Malaysia’s domestic demand remains a robust buffer. According to Abdul, this internal strength will be instrumental in supporting growth throughout 2025, offering stability amid an increasingly complex international environment.
