MALAYSIA’S economy expanded by 4.4 per cent year-on-year in the second quarter of 2025, matching the growth rate recorded in the first quarter, according to official data released by the Department of Statistics Malaysia.
The steady pace of growth was driven largely by robust domestic spending and key sectoral contributions from services, manufacturing and construction. However, external challenges including volatile tariffs and prolonged global political uncertainty continue to cast a shadow over the outlook.
“Overall, domestic expenditure remains the main driver of growth, providing a firm foundation for the economy,” said Chief Statistician, Datuk Seri Mohd Uzir Mahidin, at the release of Malaysia’s Second Quarter GDP performance in collaboration with Bank Negara Malaysia (BNM) today.
“However, external conditions continue to pose challenges, influenced by ongoing tariff developments and prolonged global political uncertainty,” he added.
Seasonally adjusted, the economy grew by 2.1 per cent quarter-on-quarter, accelerating from 0.7 per cent in the first three months of 2025.
“Uncertainty surrounding tariffs continues to linger and the impact will take time to fully materialise,” said BNM Governor Datuk Seri Abdul Rasheed Ghaffour. “Nonetheless, Malaysia is facing these challenges from a position of strength.”
While acknowledging that the August tariff announcement by the United States brought some clarity, he cautioned that “we are operating in a different environment” in which forecasting remains difficult.
Still, the current official GDP projection of 4.0 to 4.8 per cent remains “broad enough” to account for such uncertainties.
On the demand side, the second quarter saw a rise in private consumption to 5.3 per cent, while private investment surged to 11.8 per cent. Public consumption increased by 6.4 per cent, with public investment rising even more sharply by 13.6 per cent.
However, net exports plummeted by 73 per cent as imports climbed and export growth slowed markedly.
From a supply perspective, the services sector grew by 5.1 per cent, slightly easing from the previous quarter. Manufacturing expanded by 3.7 per cent, while construction posted a strong but moderating growth of 12.1 per cent. Agricultural output rose modestly by 2.1 per cent, while mining and quarrying contracted further by 5.2 per cent. - August 15, 2025
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