JAKARTA - Malaysia's economy grew 4.4 percent in the first quarter of 2025 driven by a stable expansion of domestic demand.
Malaysian State Bank Governor Abdul Rasheed Ghaffour in Kuala Lumpur said Friday's economic growth was influenced by household spending that was maintained in the midst of positive labor market conditions and revenue-related policies, including revisions to the minimum wage increase and salaries of civil servants.
In addition, economic growth is also influenced by a stable expansion in investment activities supported by the realization of new and ongoing projects.
Meanwhile, from the external sector, Malaysia's economic growth has slowed down mainly due to lower mining export value. The slowdown in mining exports is offset by stronger electricity and electronics exports, as well as tourism.
In the fourth quarter of 2024, Malaysia's economy grew 4.9 percent. When viewed on a quarterly basis, adjusted seasonally, Malaysia's growth increased by 0.7 percent in the first quarter, while in the fourth quarter of 2024 its growth was minus 0.2 percent.
Malaysia's overall economic growth is also burdened by contractions in the mining sector amid lower oil and gas production.
At the same time, import growth, although more moderate, continues to be driven by strong demand from capital goods, reflecting continued investment and trade activity.
Meanwhile, Abdul said Malaysia's economic growth in 2025 would also be influenced by increased tensions and increased policy uncertainty.
According to him, the rapid development around the issue of trade tariffs is expected to affect global prospects until the end of the year.
He said that as a country with a small and open economy, Malaysia will face direct or indirect impacts from the current tariff.
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According to him, Malaysia's economic growth is expected to be slightly lower than the previous estimate of 4.5 percent to 5.5 percent by 2025.
The high uncertainty surrounding the outcome of trade negotiations and how it will reshape global trade complicates a clear assessment of the impact on current growth. The new official growth forecast will be issued in the near future, said Abdul, once there is greater visibility in those factors.
Despite external risks, he said Malaysia's economic growth would continue to be supported primarily by strong domestic demand. It provides a strong buffer against external barriers.
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