KUALA LUMPUR: The Malaysian economy expanded by 4.4 per cent in the first quarter of 2025 (1Q 2025), driven by sustained household spending supported by favourable labour market conditions and government policies, compared to 4.2 per cent in 1Q 2024.
However, this was slower than the 4.9 per cent growth recorded in 4Q 2024.
Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour said the expansion in 1Q was further supported by steady investment activity and continued export growth, particularly in the electrical and electronic sector and tourism.
“Lower oil and gas production and normalisation in motor vehicles sales and production amid high base effect were factors that weighed on growth in 1Q of 2025,” he said when announcing the 1Q 2025 gross domestic product (GDP) performance here, today.
Data from the Department of Statistics revealed that the services sector expanded by 5.0 per cent, the manufacturing sector (4.1 per cent), agriculture (0.6 per cent), mining (-2.7 per cent) and construction (14.2 per cent).
Abdul Rasheed said inflation is projected to remain moderate amid more benign global cost conditions and the absence of excess demand.
“As for 1Q 2025, headline inflation declined to 1.5 per cent, and core inflation rose to 1.9 per cent due to lower utilities and mobile services inflation, which was partially offset by higher rental inflation,” he said.
Meanwhile, the current account surplus was larger at 3.4 per cent in 1Q 2025 versus 2.6 per cent in 4Q 2024, with continued foreign direct investment (FDI) flows.
Abdul Rasheed said continued FDI inflows were supported mainly by equity injections, reinvestment of earnings and debt instruments.
“FDI was mainly channelled into the financial services and information and communication technology sub-sectors,” he said.
The central bank governor said the Malaysian economy will be affected by changes in global trade policies, though resilient domestic demand growth.
“Internal estimate points to growth to be slightly lower than the earlier forecast of 4.5-5.5 per cent. Nevertheless, Malaysia is facing this challenge from a position of strength,” he said.
Abdul Rasheed said the high uncertainty surrounding outcomes of trade negotiations and how these will reshape global trade complicates a clear assessment of their impact on growth at this juncture.
“The new official growth forecast will be released in the near future once there is greater visibility in these factors,” he added.
