MALAYSIA’S economy is estimated to have grown by 4.5 per cent in the second quarter of 2025 (Q2 2025), slightly outpacing the 4.4 per cent expansion recorded in the previous quarter, the Department of Statistics Malaysia (DOSM) announced today.
The advance estimate signals a steady momentum in April and May, with an expectation of stronger performance in June. For the first half of the year, the economy is projected to have grown by 4.4 per cent, which remains broadly in line with the government’s full-year target range of 4.5 to 5.5 per cent.
The Q2 estimate also surpasses Bloomberg’s consensus forecast of 4.2 per cent growth.
“Malaysia’s economy continued to grow in the second quarter of 2025, underpinned by firm consumer demand despite ongoing global uncertainties,” said Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin.
He noted that domestic consumption remained the key driver, aided by civil service wage adjustments, school holidays, and seasonal festive spending during Hari Raya Aidilfitri and Hari Raya Aidiladha.
“Stable labour market conditions, with low unemployment and inflation, further supported household spending,” he added.
Mohd Uzir also pointed to the sustained rollout of government cash assistance programmes such as the Sumbangan Asas Rahmah (SARA) and Sumbangan Tunai Rahmah (STR) as factors bolstering household expenditure during the quarter.
From a sectoral standpoint, the manufacturing industry saw mixed results, with 5.6 per cent growth in April moderating to 2.8 per cent in May. This was driven by continued activity in the electrical and electronics (E&E) segment and strong demand from domestic-oriented industries, as reflected in the Industrial Production Index.
Wholesale and retail trade sales, a proxy for consumer and business activity, grew 4.4 per cent in May—slightly down from 4.7 per cent in April—underpinned by stable performance in wholesale and retail trade.
However, external trade showed signs of weakness, with slower growth in May attributed to reduced global demand for Malaysian exports.
“While domestic spending remains the economy’s anchor, the external sector continues to face headwinds stemming from tariff developments and ongoing global political uncertainty,” said Mohd Uzir.
By sector, services remained the main growth contributor, expanding by 5.3 per cent in Q2 compared to 5.0 per cent in Q1. This was led by wholesale and retail trade, transportation and storage, and business services.
Manufacturing grew by 3.8 per cent, supported by higher output of electrical, electronic and optical products, processed foods, and oils and fats of vegetable and animal origin.
The construction sector registered double-digit growth of 11 per cent for the sixth consecutive quarter, buoyed by non-residential building and specialised construction activities.
Agriculture posted a 2.0 per cent increase, mainly due to improved performance in palm oil production. In contrast, the mining and quarrying sector contracted by 7.4 per cent, reflecting declines across all sub-sectors.
A detailed preliminary GDP report for the second quarter of 2025 will be released on 15 August 2025. - July 18, 2025
