Kuala lumpur: The government’s advance economic growth estimate of 4.5 percent for the second quarter of 2025 has exceeded most analysts’ projections, showcasing the country’s economic resilience. According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid highlighted that the gross domestic product (GDP) growth estimate surpassed the consensus of 4.2 percent.
He explained that the services sector, which constitutes 60 percent of the economy, experienced growth acceleration to 5.3 percent from 5.0 percent in the first quarter of the year, while agricultural output increased from 0.6 percent to 2.0 percent. Despite these positive indicators, Dr. Mohd Afzanizam cautioned that the outlook for the second half of the year might be less optimistic due to the US tariff shock anticipated to impact exports to the United States.
To mitigate potential economic challenges, Bank Negara Malaysia has proactively reduced the overnight policy rate by 25 basis points. Dr. Mohd Afzanizam emphasized that ongoing investment spending and expansionary fiscal policies would continue to bolster domestic demand, anchoring overall growth in the latter half of the year.
International Islamic University Malaysia associate professor of economics, Dr. Muhammad Irwan Ariffin, noted that Malaysia’s economy outperformed regional peers such as Indonesia, Vietnam, and Thailand in 2Q 2025. The growth was primarily driven by strong domestic demand and consistent manufacturing output. However, he warned that weakened export performance amid global trade uncertainties and looming US tariffs on Malaysian goods could present challenges moving forward.
Dr. Muhammad Irwan stressed that Malaysia’s reliance on domestic consumption provides a buffer against external shocks, stabilizing the growth trajectory through the year’s end. To maintain competitiveness and investor confidence, Dr. Muhammad Irwan advised Malaysia to focus on strategic trade negotiations and policies to support the manufacturing sector and mitigate the impact of global trade tensions.