Kuala Lumpur – Malaysia posted a 4.4% year-on-year economic growth in the first quarter of 2025, driven by solid domestic demand and sustained investment, according to Bank Negara Malaysia Governor Abdul Rasheed Ghaffour. The country’s performance, while slightly below the previous quarter’s 4.9% growth, reflects continued resilience amid global economic uncertainties.
Speaking in Kuala Lumpur on Friday, the Governor noted that household consumption remained firm, supported by favorable labor market conditions and income-related policies, such as revised minimum wage levels and adjustments to civil servant salaries.
Investment activity also contributed positively, with steady implementation of ongoing and new projects providing momentum across various sectors. This helped offset the external drag caused by weaker exports in the mining sector, particularly oil and gas. However, stronger performance in electrical and electronic exports, as well as tourism recovery, provided partial balance.
Quarter-on-quarter, Malaysia’s economy grew by 0.7% on a seasonally adjusted basis, marking a recovery from a -0.2% contraction in Q4 2024. The figures underscore Malaysia’s continued reliance on internal demand as a stabilizing factor.
However, the external outlook remains a concern. Governor Abdul highlighted rising geopolitical tensions and trade policy uncertainty — particularly surrounding tariffs — as potential risks to global economic stability. These developments, he said, are expected to affect Malaysia directly and indirectly, given the country’s small and open economy.
Due to these risks, Malaysia’s full-year growth forecast of 4.5% to 5.5% may be revised downward, pending further clarity on global trade dynamics and negotiations. The central bank indicated that an updated forecast will be announced once key external variables become clearer.
Despite these challenges, domestic demand is expected to remain the primary engine of growth, cushioning the economy against global headwinds. The policy focus remains on sustaining household spending and encouraging private investment to maintain economic momentum in the region.
