Malaysia's economy accelerated to 5.2% growth in the third quarter of 2025, up from 4.4% in the previous quarter, positioning the nation on track to reach the upper end of its annual growth target of 4.0% to 4.8%, according to Prime Minister and Finance Minister Anwar Ibrahim.
The robust expansion was driven by resilient domestic demand registering 5.8%, underpinned by strong household spending supported by favorable labor market conditions with total employment growing 3.1% to 17 million persons and unemployment holding steady at 3%, alongside government cash assistance programs including Sumbangan Tunai Rahmah and Sumbangan Asas Rahmah, according to Bank Negara Malaysia.
All major sectors contributed to growth, with manufacturing expanding 4.1%, mining and quarrying rebounding strongly at 9.7% after recovering from scheduled maintenance, construction activities growing 11.8%, and services advancing 5%, while improved exports partially reflecting front-loading activities further sustained momentum despite global uncertainties.
For the first nine months of 2025, Malaysia's economy expanded by 4.7%, with stable inflation remaining at 1.3%, manufacturing sales rising to RM500.1 billion, total trade reaching RM769.8 billion with a surplus of RM50.3 billion, and foreign direct investment recording net inflows of RM8.5 billion, according to official government data.
Looking ahead, Bank Negara Malaysia Governor Abdul Rasheed Ghaffour emphasized the need to strengthen economic buffers amid challenging global conditions, while the government remains committed to fiscal discipline by reducing the deficit to 3.8% in 2025 and 3.5% in 2026 through structural reforms to enhance productivity and competitiveness.
