Kuala lumpur: Malaysia’s economy is projected to grow by 4.5 percent in the second quarter of 2025, slightly surpassing the previous quarter’s growth of 4.4 percent. The anticipated growth is primarily fueled by robust domestic demand amidst global economic challenges.
According to BERNAMA News Agency, the Statistics Department Malaysia (DOSM) stated that the growth momentum was maintained in April and May, with stronger performance expected in June. The overall economy is estimated to have moderately grown by 4.4 percent in the first half of 2025.
Chief Statistician Datuk Seri Mohd Uzir Mahidin highlighted that domestic consumption remains the key driver of growth. This has been significantly boosted by the effects of public sector wage adjustments, school holidays, and seasonal spending during Hari Raya Aidilfitri and Hari Raya Aidiladha. A stable labor market, coupled with low unemployment and inflation rates, further supported household spending. Cash assistance programs like Sumbangan Asas Rahmah and Sumbangan Tunai Rahmah played a vital role in sustaining household consumption.
Mohd Uzir also noted that the manufacturing sector experienced varied performance, with a growth of 5.6 percent in April, moderating to 2.8 percent in May. This growth was largely due to sustained activity in the electrical and electronics sub-sector and robust demand from domestic-oriented industries. Distributive trade sales rose by 4.4 percent in May, easing from 4.7 percent in April, supported by steady performances in wholesale and retail trade.
However, the external trade sector faced mixed outcomes, with significantly slower growth in May due to weaker demand for goods exports. While domestic consumption was strong, external components of the economy faced challenges from tariff developments and global political uncertainties.
Sector-wise, services remained the primary driver of economic growth in the second quarter of 2025, registering a 5.3 percent growth, led by wholesale and retail trade, transportation and storage, and business services sub-sectors. The manufacturing sector recorded a growth of 3.8 percent, supported by production in electrical, electronic and optical products, as well as vegetable and animal oils, fats, and food processing.
The construction sector achieved its sixth consecutive quarter of double-digit growth at 11.0 percent, primarily supported by non-residential buildings and specialized construction activities. Meanwhile, the agriculture sector posted a 2 percent rise, driven by the oil palm sub-sector. However, the mining and quarrying sector declined further by 7.4 percent, reflecting lower production across all sub-sectors.