KUALA LUMPUR, 13 November 2025 — Malaysia’s economy is on track to expand closer to 4.8% in 2025, defying headwinds from U.S. tariffs as a resurgent export sector delivered stronger-than-expected momentum in the third quarter, according to Bank Negara Malaysia (BNM).
Governor Abdul Rasheed Ghaffour said full-year growth is likely to land “closer to” the upper end of the official 4%–4.8% forecast range, and may even exceed it if current trends hold.
The upbeat outlook comes despite the initial impact of U.S. President Donald Trump’s new tariff measures introduced in August, pressures that have slowed neighbouring economies including Indonesia and the Philippines.
Exports Surge, Domestic Demand Strengthens
Malaysia’s GDP grew 5.2% in the third quarter from a year earlier, matching both the advance estimate and the median Bloomberg forecast. Quarter-on-quarter, GDP expanded 2.4%.
Exports jumped 12.2% in September, beating all estimates, as manufacturers front-loaded electronics shipments before higher levies.
The central bank said growth in 2025 will be anchored by:
- expansion in household spending,
- sustained investment activity, and
- a moderating but still supportive trade performance.
BNM’s July interest rate cut is still filtering through the economy and “will provide some support,” Rasheed said.
Monetary Policy: “Supportive and Appropriate”
BNM kept its benchmark rate unchanged at 2.75%, with Rasheed noting that Malaysia has both fiscal and monetary room “to take further action” if needed.
Economists agree that strong third-quarter numbers reduce the likelihood of any near-term rate changes.
“Strong growth, which is also robust in terms of breadth, suggests that BNM will stay on hold at least through the first half of 2026,” said Sanjay Mathur of Australia & New Zealand Banking Group. “BNM can now afford to hold its firepower.”
Prime Minister Anwar Ibrahim also expressed optimism earlier this week, saying Malaysia has the potential to exceed its full-year forecast.
Data Centers Emerge as New Growth Engine
Policymakers highlighted data centers as a strategic opportunity to “harness new growth” as global conditions remain challenging.
- Data-center export services surged to RM10.7 billion in the first nine months of 2025
- Up from RM1.2 billion in the same period of 2024
BNM said efforts to localise supply chains will help ensure gains from the digital economy flow across Malaysian industries.
Ringgit Leads Asia as Best Performer
The ringgit has strengthened over 8% against the U.S. dollar this year, making it Asia’s top-performing currency. It held steady with a 0.1% dip at midday on Wednesday.
“Malaysia’s positive economic growth prospects, supported by the government’s commitment to domestic structural reforms and fiscal sustainability, will continue to provide support to the ringgit,” BNM said.
BNM reaffirmed it will continue to ensure an orderly functioning of the foreign-exchange market.
Outlook for 2026: Moderation Ahead
Malaysia sees growth moderating to 4%–4.5% in 2026 amid heightened global volatility and uncertainties surrounding semiconductor tariffs.
The U.S. remains Malaysia’s third-largest chip export market, and Kuala Lumpur is still in talks with Washington to secure exemptions from levies that may reach as high as 300%.
Improved employment, rising wages and expanding private and public investment contributed to Malaysia’s resilience through the third quarter.
BNM has only cut rates once in 2025 but injected liquidity in May to encourage lending and support economic activity.
