KUALA LUMPUR, Saturday, 17 January 2026 — Malaysia’s economy expanded 5.7 per cent in the fourth quarter of 2025 compared with a year earlier, according to official advance estimates from the Department of Statistics Malaysia, marking the fastest pace of growth in more than a year.
The stronger-than-expected growth in the October–December quarter outpaced the 5.2 per cent expansion in Q3 2025, with key sectors such as services, manufacturing and construction contributing to the acceleration. Domestic demand remained robust, bolstered by household spending and business activity, while exports continued to show resilience despite external challenges.
Malaysia’s full-year economic expansion for 2025 is estimated at around 4.9 per cent, above the government and central bank’s earlier forecasts of 4.0 per cent to 4.8 per cent and only modestly below 2024’s 5.1 per cent growth. Analysts said the 2025 performance reflects solid domestic demand and firm activity in the manufacturing and services sectors, even amid rising global trade uncertainties.
The fourth-quarter performance underscores the economy’s momentum heading into 2026, though analysts and policymakers note that lingering external pressures, including trade tensions and tariff impacts, could dampen growth this year. Malaysia’s government has forecast GDP growth of 4.0 per cent to 4.5 per cent for 2026, while the central bank may take a cautious approach on monetary policy given the resilient expansion.
Economists also point out that the fourth-quarter growth was supported by continued expansion in domestic sectors and sustained export demand, which helped offset global headwinds such as tariffs on some Malaysian exports imposed by key trading partners.
Malaysia’s strong Q4 performance helps set a positive tone for the new year, highlighting the country’s balanced drivers of growth and the importance of both internal spending and external trade in supporting the economy.
