MALAYSIA’s economy expanded by an estimated 5.2% in the third quarter of 2025, up from 4.4% in the previous quarter, driven by resilient domestic demand and a broad-based recovery across key sectors including services, manufacturing, mining, and construction.
Quarter-on-quarter, economic output grew by 5.5%, compared to a modest 1.0% increase in Q2, according to advance estimates released by the Department of Statistics Malaysia (DOSM).
The Services sector, which remains the largest contributor to national GDP, grew by 5.1%, supported by strong activity in wholesale and retail trade, transport, and food and accommodation services.
The manufacturing sector expanded by 4.0%, underpinned by higher output in electrical and electronic (E&E) goods, food processing, and metal-related industries.
Mining and quarrying rebounded with a 10.9% increase following a 5.2% contraction in the previous quarter, driven by higher production of natural gas and crude oil.
Construction sustained its double-digit growth, rising 11.2%, largely supported by civil engineering, non-residential building, and specialised construction works.
Agriculture, however, slowed to just 0.4% growth amid declines in palm oil and rubber, despite gains in livestock and fishing.
For the first nine months of 2025, the economy grew by 4.7%, slightly below the 5.2% recorded in the same period last year. DOSM said the positive momentum across sectors is expected to provide a solid foundation for continued growth into the final quarter of the year. Official Q3 figures will be released on 14 November.
Meanwhile, Malaysia’s external trade recorded a strong rebound in September, with total trade rising 9.8% year-on-year to RM257.51 billion.
Exports surged 12.2% to RM138.68 billion — the second-highest monthly figure this year — while imports rose 7.3% to RM118.82 billion.
The trade surplus widened to RM19.86 billion, marking the 65th consecutive month of surplus since May 2020.
The Ministry of Investment, Trade and Industry (MITI) today, said September’s export performance was bolstered by the manufacturing sector, particularly E&E products, which reached a record high, increasing by nearly RM11 billion.
“Exports also rose in machinery, equipment and parts, as well as scientific and optical instruments,” MITI noted, adding that the mining sector returned to growth after 13 straight months of contraction. Palm oil and related products led the agriculture export gains.
Malaysia posted higher exports to most of its major markets, including ASEAN, China, the United States, Taiwan, and the European Union. Exports to Free Trade Agreement (FTA) partners also expanded, with strong performances recorded in Mexico, India, Australia, Türkiye, the UK, and Canada — underscoring the strategic importance of Malaysia’s 18 FTAs in enabling trade resilience.
For the January–September 2025 period, Malaysia recorded its highest-ever cumulative trade performance.
Total trade rose 4.4% year-on-year to RM2.235 trillion. Exports climbed 4.8% to RM1.170 trillion, and imports increased 4.0% to RM1.064 trillion, resulting in a RM105.65 billion trade surplus.
On the global front, the World Trade Organization (WTO) recently revised its forecast for global merchandise trade volume growth in 2025 to 2.4%, up from 0.9% previously, citing a rise in demand for AI-related goods and improving cross-border flows.
The World Bank has likewise revised Malaysia’s 2025 GDP forecast upward to 4.1%, from 3.9%, crediting stronger-than-expected E&E performance and robust domestic demand.
Looking ahead, the Economic Outlook 2026 projects Malaysia’s trade to grow by 3.9%, with exports and imports rising by 3.3% and 4.6%, respectively.
However, MITI cautioned that rising trade tensions and potential new tariffs among major economies remain significant risks.
“These developments could disrupt supply chains, raise export costs, and heighten volatility,” the ministry warned, urging Malaysian exporters to diversify markets, reinforce supply chain resilience, and closely monitor global policy shifts.
MITI and MATRADE reiterated their commitment to supporting businesses in navigating these risks and tapping into new growth opportunities through Malaysia’s extensive FTA network. - October 17, 2025
