IMF evaluation highlights Malaysia’s economic resilience, prudent policies and strong domestic demand, with GDP growth at 5.2% in Q3 2025.
KUALA LUMPUR: The International Monetary Fund’s assessment of Malaysia’s economy underscores the critical role of prudent macroeconomic and financial policies in anchoring growth.
Putra Business School economist Associate Professor Ahmed Razman Abdul Latiff said the country’s economic performance continues to reflect strong underlying fundamentals.
He said the IMF’s assessment highlighted that strong economic performance has helped maintain stability, providing a buffer against external shocks.
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“Nevertheless, while near-term prospects remain positive, downside risks persist,” he told Bernama.
He cited risks from weaker global demand, trade disruptions from geopolitical events and financial market volatility.
The IMF released a statement noting Malaysia has shown notable resilience against global trade tensions and policy uncertainty.
It said the economy is growing at a healthy pace this year, supported by strong domestic consumption and investment.
Solid employment growth and a global tech-sector upcycle were also cited as supportive factors.
The fund highlighted that the October 2025 Malaysia-United States trade deal has helped reduce uncertainty for businesses and consumers.
It noted Malaysia’s economic resilience is expected to continue in the near term, supported by strong domestic demand.
Ahmed Razman opined that continued fiscal discipline targeting a lower deficit will be critical.
Data-driven monetary policy and structural reforms on wages and job mismatch are also needed to rebuild economic buffers.
“It is crucial in ensuring sustainable and inclusive growth amid an uncertain global environment,” he added.
Sunway University economist Dr Yeah Kim Leng said the positive IMF review affirmed Malaysia’s resilience.
He said this was demonstrated by the economy’s ability to buck slowdown trends and shield itself from global headwinds.
This translated favourably as the economy expanded above expectations, registering 5.2% GDP growth in the third quarter of 2025.
“The preemptive interest rate cut coupled with gradual approaches in fiscal consolidation and subsidy rationalisation have been prescient,” he said.
He noted these measures helped navigate the turbulent global landscape while sustaining consumer and investor confidence.
“IMF’s favourable assessment is expected to further fortify confidence,” he added. – Bernama
