KUALA LUMPUR — Malaysia’s economy expanded by 4.4% in the first quarter of 2025 compared to the same period last year, marking a slowdown from the previous quarter as global trade frictions weighed on domestic activity and investment sentiment.
The January–March performance was consistent with official projections, though slightly under the 4.5% growth anticipated by economists polled by Reuters. It also trailed the revised 4.9% growth rate recorded in Q4 2024.
Bank Negara Malaysia Governor Abdul Rasheed Ghaffour said the modest growth was underpinned by resilient consumer spending, favourable labour market conditions, steady investment activity, and ongoing export contributions. However, the economy faced drag from reduced oil and gas output and a cooling-off in vehicle sales and manufacturing following a period of strong demand.
On a quarter-on-quarter seasonally adjusted basis, GDP grew 0.7%, recovering from a 0.2% contraction in the preceding quarter.
The central bank now anticipates full-year growth in 2025 to fall slightly below its earlier forecast of 4.5% to 5.5%, with updated projections expected in the coming weeks. “The balance of risks is currently skewed to the downside,” Abdul Rasheed said, citing slower global growth and the impact of trade restrictions on key export markets.
Prime Minister Anwar Ibrahim acknowledged earlier this month that while the temporary suspension of most U.S. tariffs had softened the blow for now, Malaysia’s full-year growth targets remain at risk. Unless negotiations yield a reprieve, a 24% tariff on Malaysian exports to the U.S. is scheduled to take effect in July.