Kuala lumpur: Strong domestic demand helped Malaysia outperform expectations, lifting fourth-quarter 2025 GDP to a three-year high of 6.3 per cent and full-year growth to 5.2 per cent, above the government's forecast, said the Ministry of Finance (MOF).

According to BERNAMA News Agency, this momentum pushed full-year 2025 GDP growth to 5.2 per cent, up from the 5.1 per cent achieved in 2024, putting it well ahead of the government's official forecast range of four per cent to 4.8 per cent. The Ministry of Finance highlighted that for the second consecutive year, the MADANI Government successfully narrowed the fiscal deficit beyond its target, achieving a reduction to 3.7 per cent, compared to the initial projection of 3.8 per cent, and down from 4.1 per cent in 2024.

Bank Negara Malaysia (BNM) previously announced that the better-than-expected GDP performance was also attributed to favourable exports, which exceeded the forecast range of 4-4.8 per cent. Meanwhile, Prime Minister Datuk Seri Anwar Ibrahim noted that the strength in macroeconomic indicators was benefiting the rakyat, particularly with the lowest unemployment rate in over a decade at 2.9 per cent and lower inflation in 2025 at 1.4 per cent, down from 1.8 per cent in 2024.

Anwar, who also serves as the Finance Minister, stated that savings from fiscal reforms were reallocated to social assistance programs such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA), while the government remains committed to public infrastructure projects that improve the rakyat's quality of life. He emphasized that after three years of the MADANI Administration, the articulation of a coherent policy framework, as set out in Ekonomi MADANI, followed by continued demonstration of tough reforms, has strengthened investor confidence in Malaysia. This is reflected in the ringgit's ascent as Asia's best-performing currency, rising direct investments, and the FTSE Bursa Malaysia KLCI's strongest performance in seven years.

Anwar warned that while the MADANI Government recognises the progress achieved thus far, it must not become complacent, as global headwinds and intensifying trade tensions continue to shape the lives of all Malaysians. He stressed the importance of staying the course on Ekonomi MADANI reforms, making 2026 a year to deepen the resolve to promote higher value-added economic activities, eradicate corruption, improve the rakyat's quality of life, and enhance the ease of doing business.

MOF anticipates the economy will remain on a steady trajectory in 2026, supported by resilient domestic demand, firm household consumption, and continued investment momentum. Higher tourism activity under Visit Malaysia 2026, alongside increases in the minimum wage and civil servant salaries, will further reinforce consumer spending. The ministry added that Budget 2026 will lay the foundation for the 13th Malaysia Plan, 2026-2030, and other policy levers to promote inclusive and sustainable economic expansion. At the same time, the MADANI Government will continue to uphold fiscal discipline to safeguard long-term sustainability while supporting growth momentum.