Kuala lumpur: Malaysia’s unemployment rate is expected to remain at 3.0 percent in 2025 and 2026, supported by steady employment growth and continued hiring in the domestic-oriented services sector, according to MBSB Investment Bank Bhd (MBSB IB).
According to BERNAMA News Agency, MBSB IB reported that the jobless rate eased from an average of 3.3 percent in 2024 to 3.0 percent this year and is projected to sustain this level through 2026. The bank’s research note highlighted that investment expansion, project realization, and key national initiatives, including the 13th Malaysia Plan, National Semiconductor Strategy, New Industrial Master Plan 2030, and the government-linked Enterprises Activation and Reform Programme, will boost job creation and strengthen labor demand in Malaysia.
The research also noted that a healthy labor market would continue to support domestic consumption and economic growth heading into 2026. However, it cautioned that potential tariff-related disruptions could dampen global demand and hiring in export- and commodity-linked sectors. On the upside, robust tourism activity anticipated for Visit Malaysia Year 2026 and stronger demand for electrical and electronics and tech products are expected to provide additional support to employment prospects.
Meanwhile, MBSB IB observed that Malaysia’s labor market remained resilient in October 2025, with the unemployment rate holding steady at 3.0 percent for the sixth consecutive month, marking the lowest level in a decade. The bank reported that steady employment growth of 3.1 percent year-on-year (y-o-y) has outpaced labor force expansion of 2.8 percent y-o-y since August 2021, with both indicators maintaining their pace from the previous month.
Furthermore, the number of unemployed people remained unchanged at 519,000, although on an annual basis, it fell at a slower pace of 4.9 percent y-o-y compared with a 5.5 percent decline in September 2025. The youth unemployment rate (aged 15-24) held steady at 10.1 percent, highlighting persistently elevated joblessness among young people and the challenges faced by graduates and new entrants in securing employment and transitioning into the labor market.