KUALA LUMPUR— Malaysia’s economy grew faster than expected in the third quarter of 2025, expanding 5.2 per cent year-on-year despite higher US tariffs imposed by President Donald Trump and persistent global trade tensions. According to advance estimates released by the Department of Statistics on Friday, the July–September reading exceeded even the most optimistic forecasts in a Bloomberg survey and marked the strongest pace of growth in a year.
Chief Statistician Datuk Seri Mohd Uzir Mahidin said domestic demand remained the main driver of expansion, led by robust tourism activity during school and public holidays. “Sustained capital investment and rising external demand also contributed to the broad-based momentum,” he added, crediting government cash disbursements and a recent interest rate cut for supporting household spending.
Sectors such as manufacturing and services recorded strong contributions, while rising exports offered a surprising counterpoint to US tariff measures. September export data showed a 12.2 per cent surge—topping forecasts—while imports grew 7.3 per cent, lifting the trade surplus to RM19.86 billion (S$6.1 billion). The Ministry of Investment, Trade and Industry said growth was observed across all major export categories, notably in electrical and electronic products.
Exports to the United States jumped 24.4 per cent in September, reflecting accelerated shipments ahead of the new tariffs, while exports to China rose 2.9 per cent. Economists said the figures illustrate Malaysia’s diversified export base and resilient manufacturing sector, even amid external headwinds.
The central bank’s July rate cut of 25 basis points, paired with increased liquidity injections, helped shield the economy from volatility. The government’s one-off RM100 cash assistance further boosted private consumption, offsetting external slowdowns.
Regional peers have shown similar resilience against President Trump’s trade measures. Vietnam’s economy surged 8.23 per cent in the same quarter, its strongest since 2022 while Singapore posted a better-than-expected 2.9 per cent expansion. The Philippines, Thailand, and Indonesia are set to release their economic data in November.
With third-quarter performance surpassing projections, Malaysia remains on track to achieve its official 2025 growth target of 4 to 4.8 per cent. The government expects moderation to around 4 to 4.5 per cent next year amid continued global uncertainties.