Malaysia records 4.4% GDP growth in Q1 2025: DOSM

The quarter’s economic expansion was supported by steady performance on the supply side, notably in the services, manufacturing, and construction sectors.

Malaysia's economy grew by 4.4% in the first quarter of 2025, as compared to 4.9% in Q4 2024, says the country's Department of Statistics in its' Gross Domestic Product First Quarter 2025 report.

Released on 16 May, the report noted that on a quarter-on-quarter seasonally adjusted basis, the country's gross domestic product (GDP) gew marginally by 0.7% in Q1 2025, following a decline of 0.2% in Q4 2024. Monthly economic performance showed steady growth, with increases of 3.5% in January and 3.6% in February, before accelerating to 6% in March 2025.

According to the Chief Statistician of Malaysia, Dato’ Sri Dr. Mohd Uzir Mahidin, the economic expansion during the quarter was supported by steady performance on the supply side, particularly in the Services, Manufacturing, and Construction sectors. He noted that this indicated a healthy pace of domestic production and a well-diversified industrial base, despite ongoing global challenges.

"On the demand side, consumer and business sentiment remained positive, with spending boosted by festive celebrations, travel activities and ongoing investments, particularly in construction-related projects.

"The salary increment for civil servants under Sistem Saraan Perkhidmatan Awam (SSPA) along with the rollout of the first phase of Sumbangan Tunai Rahmah (STR) further support the overall economic momentum," the Chief Statistician shared. 

Here is a breakdown of the GDP performance by production and expenditure according to sector: 

Services

• The services sector grew by 5% in Q1 2025 (Q4 2024: 5.5%), driven mainly by wholesale & retail trade at 4.3%.
  • Wholesale and retail segments rose 5.4% and 5.2%, respectively.
  • Motor vehicles segment declined by -3.7%.
• Transportation & storage and business services posted strong growth of 9.5% and 7.7%, respectively, supported by robust demand in freight and professional services.
• On a quarter-on-quarter seasonally adjusted basis, services expanded by 0.7% (Q4 2024: 0.3%).

Manufacturing 

• The Manufacturing sector grew by 4.1% in Q1 2025 (Q4 2024: 4.2%).
  • Growth was supported by strong external demand for electrical & electronic products, highlighting Malaysia’s role in global supply chains.
• Domestic-oriented industries weakened, mainly due to lower output in motor vehicles and transport equipment.
• On a quarter-on-quarter seasonally adjusted basis, the sector rose by 1.4%, rebounding from -1.2% in Q4 2024.

Construction 

• Expanded by 14.2% in Q1 2025 (Q4 2024: 20.7%), marking five consecutive quarters of double-digit growth.
  • Driven by non-residential buildings (+21.4%) due to data centre and factory projects, especially in Johor.
  • Other contributors:
    • Specialised construction activities: +17.2%
    • Residential buildings: +16.6%
    • Civil engineering: +5.2%
• Quarter-on-quarter seasonally adjusted growth: +1.1% (Q4 2024: -0.2%)

Agriculture

• Rebounded to +0.6% in Q1 2025 (Q4 2024: -0.7%)
  • Boosted by Marine fishing (+10.3%) and other agriculture (+2.2%)—notably vegetables and fruits.
  • Oil palm segment declined -3.1% due to lower fresh fruit bunch yields.
• Quarter-on-quarter seasonally adjusted rebound: +1.1% (Q4 2024: -2.8%)

Mining & quarrying 

• Declined by -2.7% in Q1 2025 (Q4 2024: -0.7%)
  • Affected by lower output in:
    • Natural gas: -2.2%
    • Crude oil & condensate: -4.6%
  • Reflects subdued activity in upstream production.
• Quarter-on-quarter seasonally adjusted: -1.9% (Q4 2024: +4.0%)

Private final consumption expenditure

• Grew by 5.0% in Q1 2025 (Q4 2024: 5.3%)
  • Driven by spending on:
    • Transport: +9.1%
    • Restaurants & hotels: +13.2%
    • Food & non-alcoholic beverages: +4.3%
  • Growth reflects increased travel, tourism, and festive-related activity.
• Quarter-on-quarter seasonally adjusted increase: +1.5% (Q4 2024: +0.9%)

Government final consumption expenditure

• Rose by 4.3% in Q1 2025 (Q4 2024: 4.0%)
  • Driven by higher spending on supplies and services.
• Quarter-on-quarter seasonally adjusted rebound: +0.1% (Q4 2024: -0.6%)

Gross fixed capital formation (GFCF)

• Expanded by 9.7% (Q4 2024: 11.8%)
  • Boosted by:
    • Structure component: +13.4% (residential and non-residential construction)
    • Machinery & Equipment: +5.4%
    • Other assets: +7.2%
  • Strong contributions from both public and private sector investments.
• Quarter-on-quarter seasonally adjusted improvement: +0.8% (Q4 2024: -0.03%)

Exports

• Rose by 4.1% in Q1 2025 (Q4 2024: 8.7%)
  • Outpaced imports for the second consecutive quarter.
• Net exports increased by 19.6%, moderating from 63.6% in the previous quarter.
  • Highlights resilience in trade amid global uncertainties.

Imports

• Grew by 3.1% in Q1 2025 (Q4 2024: 5.9%)
  • Slower pace compared to exports, contributing to a positive trade balance.

READ MORE: Malaysia’s labour demand continued to expand by 1.4% in Q1 2025 

Lead image / DOSM