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Third-quarter GDP growth reached 5.2%, supported by services and manufacturing.
Dato’ Sri Dr. Mohd Uzir Mahidin, Chief Statisticial Malaysia, has said that Malaysia’s GDP grew 5.2% in the third quarter of 2025, up from 4.4% in the previous quarter. He said all sectors contributed to this, particularly services and manufacturing, while mining and quarrying returned to positive growth. Quarter-on-quarter, the economy expanded 5.5%, compared with 1.0% in the second quarter.
The data above was released by the Department of Statistics, Malaysia (DOSM) in it's latest report, Malaysian Economic Statistics Review (MESR), Volume 10/2025, covering August 2025 statistics and some forthcoming September data.
In Malaysia, the Industrial Production Index (IPI) rose 4.9% year-on-year in August, up from 4.2% in July. Mining grew 16.8%, while manufacturing increased 2.8% and electricity 1.6%. Month-on-month, the index rose 2.4%, with average growth of 2.7% for January to August 2025.
Manufacturing sales rose 2.7% year-on-year to RM168.3bn in August, up from RM162.5bn in July. Growth was led by food, beverages and tobacco at 9.6%, electrical and electronics products at 3.7%, and non-metallic mineral products, basic metal and fabricated metal products at 3.3%. Month-on-month, sales increased 3.5%, bringing cumulative sales for January to August 2025 to RM1.3tn, an increase from 3.5% last year.
Wholesale and retail trade recorded RM156.6bn in sales in August, a 4.9% increase year-on-year. While the former contributed RM69.6bn, up 5.1%, while the latter reached RM67.3bn, an increase from 5.0%, and motor vehicles RM19.6bn, up 4.0%. The volume index of wholesale & retails trade rose 4.3% year-on-year to 165.5 points. Month-on-month, the index edged up 0.1% while the seasonally adjusted index slipped 0.5%.
External trade in August showed mixed trends. Exports rose 1.9% year-on-year to RM131.6bn, while imports fell 5.9% to RM115.5bn. Total trade eased 1.9% to RM247.1bn compared with August 2024. The trade surplus surged 153.8% to RM16.1bn, the largest annual increase since December 2020. Trade performance stabilised in September with 9.8bn growth.
Inflation rose slightly to 1.3% year-on-year in August, driven by insurance and financial services at 5.6%, restaurants and accommodation at 3.5%, and food and beverages at 2.0%. Month-on-month, inflation rose 0.1%. In September, inflation accelerated to 1.5%, with the Consumer Price Index (CPI) at 135.2 points.
The Producer Price Index (PPI) for local production fell 2.8% year-on-year in August, moderating from 3.8% in July. Declines were seen in manufacturing at 4.0% and mining at 3.4%, while agriculture, forestry and fishing rose 7.3%, electricity and gas supply 4.1%, and water supply 3.4%. Month-on-month, the PPI increased 0.1% in August. In September, the PPI decreased 0.8%.
Malaysia’s labour market remained stable. The labour force grew 2.8% year-on-year to 17.51mn. Labour force participation increased to 70.9%. Employment rose to 16.99mn, keeping the employment-to-population ratio at 68.8%. The number of unemployed declined slightly to 520,000, leaving the unemployment rate at 3.0%.
The Leading Index (LI) declined 0.5% year-on-year to 113.7 points in August, reflecting lower imports of basic precious and non-ferrous metals and semiconductors. Month-on-month, the index contracted 0.8%, showing caution in global trade. Overall, the trend remained below the 100-point threshold, signalling modest growth ahead amid stable domestic conditions and external uncertainties.
Overall, across the world, the International Monetary Fund (IMF) forecasts global growth of 3.2% in 2025 and 3.1% in 2026, supported by policy adjustments and lower trade barriers. Advanced economies are expected to grow 1.6% in 2026, while emerging and developing economies are projected to expand around 4.0%. In East Asia and the Pacific, growth remains moderate. China’s economy is forecast to grow 4.2%, Viet Nam 8.2%, and Singapore 2.9%, reflecting softer trade activity.
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Lead image / DOSM
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