Kuala lumpur: MBSB Investment Bank Bhd (MBSB IB) projected Malaysia’s gross domestic product (GDP) to grow at 4.6 percent this year. This growth is driven by robust performance in the third quarter of 2025 and fewer negative impacts from tighter United States trade rules on Malaysia’s external trade and production activities, as noted in a research report released today.

According to BERNAMA News Agency, the investment bank reported that the country’s GDP grew at a faster pace by 5.2 percent year-on-year (y-o-y) in the third quarter of 2025, compared to the second quarter of 2025 which saw a 4.4 percent y-o-y growth. This growth was slightly higher than MBSB IB’s expectation of 5.1 percent y-o-y, attributed to a sharper moderation in the services sector.

In addition to the recovery in mining output, Malaysia is benefiting from the global technology upcycle. The investment bank anticipates that resilience in domestic demand will continue to drive Malaysia’s economic growth into 2026, supported by a healthy labor market and stable inflation.

MBSB IB highlighted that the country’s leading index rebounded with a growth of 0.8 percent y-o-y in September 2025 after a decline of -0.3 percent y-o-y over the previous two months. This improvement was driven by a significant expansion in the number of new companies registered (16 percent y-o-y) and real imports of semiconductors (15.8 percent y-o-y).

The investment bank also reported that Malaysia’s industrial production index growth increased to 5.7 percent y-o-y in September 2025, up from 4.8 percent y-o-y in August 2025. This growth surpassed estimates and market expectations, supported by continued growth across all three major sectors.

Malaysia’s labor market remained strong in September 2025, with the unemployment rate steady at three percent for the fifth consecutive month, marking the lowest level in a decade. Additionally, the country’s distributive trade accelerated to 6.6 percent y-o-y in September 2025, compared to 4.9 percent y-o-y in August 2025, bolstered by stronger expansion across all segments.