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MOF's Q1 2025 Malaysian Economy report also revealed that real GDP growth accelerated to 4.4%, supported by robust domestic demand and recovery in key sectors, reflecting the Government's commitment to fiscal sustainability and economic resilience.
Malaysia’s labour market remained resilient in the first quarter of 2025, with a labour force of 17.23mn and a stable unemployment rate of 3.1%, according to the Department of Statistics Malaysia (DOSM). The Labour Market Review for Q1 2025 highlights continued employment growth, reduced underemployment, and improving labour productivity — all signalling a strong and adaptable workforce.
Adding to this positive outlook, the Ministry of Finance (MOF) released its First Quarter 2025 Malaysian Economy report on 22 May 2025 (Thursday), underscoring the nation’s overall economic health. The report revealed that the Federal Government achieved a lower quarterly fiscal deficit of RM21.9bn, down from RM26.4bn in the same period last year. This improvement was driven by better revenue collection and expenditure optimisation aligned with fiscal consolidation efforts.
The report also highlighted several key milestones for Q1 2025:
- Federal Government revenue increased by 3% year-on-year to RM72.1bn, fuelled by higher tax collections, particularly from a surge in sales and service tax (SST) receipts and individual income tax.
- Total expenditure contracted by 2.5% to RM94.2bn, primarily due to reduced subsidy spending following the diesel subsidy retargeting programme and lower global oil prices. Meanwhile, targeted social assistance programmes such as Sumbangan Tunai Rahmah (STR), Sumbangan Asas Rahmah (SARA), Fish Landing Incentive, and Paddy Price Subsidy Scheme were strengthened. Grants to statutory bodies were also optimised through enhanced operational efficiency.
- Malaysia’s real Gross Domestic Product (GDP) grew by 4.4%, surpassing the 4.2% growth recorded in the same quarter last year. This was driven by resilient domestic demand and sustained recovery in key sectors including services, manufacturing, and construction.
Dato’ Sri Dr. Mohd Uzir Mahidin, Chief Statistician of Malaysia, noted that labour supply remained strong, supported by a 3% year-on-year increase in employed persons to 16.7mn and a rise in labour participation rate to 70.7%. Underemployment improved, with fewer individuals working less than 30 hours per week and a downward trend in skills-related underemployment.
Labour demand also rose by 1.4% to 9.06mn jobs, with a near-saturation job fill rate of 97.9%. Labour productivity per person and per hour worked saw modest gains, reflecting continued improvements in workforce efficiency.
Highlighting the government’s plans moving forward, the chief statistician noted a commitment to training 5,000 Malaysians in key tech sectors and strengthen Technical and Vocational Education and Training (TVET) programmes in the coming years, in efforts to meet greater demand for digital expertise.
Moving forward, he added, "emphasis will be placed on upskilling, economic diversification, and leveraging technology to drive productivity as well as building a competitive, resilient and future-oriented labour force."
Infographics / Q1 2025 Malaysian Economy
Lead image / DOSM
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