Malaysia's economy expected to grow between 4% - 4.8% in 2025

"The sustained strength in economic activity and moderate inflation provide a supportive environment to pursue structural reforms for a more resilient and competitive Malaysia in the future," said Bank Negara Malaysia Governor Dato’ Sri Abdul Rasheed Ghaffour.

Malaysia’s economy is on track to grow between 4% and 4.8% in 2025, according to Bank Negara Malaysia (BNM), signaling cautious optimism amid a shifting global backdrop.

The forecast builds on the Department of Statistics’ April advance estimate, which pegged Q1 growth at 4.4% — a modest dip from the previous quarter’s 5%.

While global headwinds persist — ranging from trade tensions to geopolitical volatility, Malaysia is entering this period from a relatively strong position. Domestic demand continues to pull its weight, bolstered by a healthy labour market and policy moves aimed at keeping private consumption on track.

Investment momentum also remains steady, supported by long-term infrastructure projects, high realisation of approved investments, and national development initiatives.

Bank Negara Malaysia Governor Dato’ Sri Abdul Rasheed Ghaffour said: "The Malaysian economy remains resilient despite global uncertainties. This is, in part, the outcome of structural reforms that we have undertaken over the years. The sustained strength in economic activity and moderate inflation provide a supportive environment to pursue structural reforms for a more resilient and competitive Malaysia in the future."

As global economic conditions grow more uncertain with shifting trade policies and tariffs, Malaysia’s open economy is expected to stay afloat. If trade negotiations tilt in the right direction, and demand for electrical and electronic goods stays strong, export performance could receive a welcome boost, BNM noted. Tourism is also expected to play a bigger role in driving growth.

On the inflation front, BNM expects headline inflation to average between 1.5% and 2.3% next year — an outlook shaped by subdued global commodity prices and restrained domestic cost pressures.

READ MORE: Malaysia's economy holds steady amid global uncertainty: DOSM