Economic and Financial Developments in Malaysia in the Second Quarter of 2025.

Malaysia’s economy grew by 4.4% year-on-year in the second quarter of 2025, supported by strong domestic demand and continued export growth. Private consumption rose 5.3%, driven by positive labor market conditions, while private and public investments increased 11.8% and 13.6%, respectively.

The services sector grew 5.1%, manufacturing expanded 3.7%, and construction surged 12.1%, though mining output declined 5.2% due to planned maintenance. E&E exports and robust tourism activity helped offset weaker mining-related exports, with travel receipts reaching RM95.3 billion in 2024.

Headline inflation eased to 1.3%, leading Bank Negara Malaysia to reduce the Overnight Policy Rate (OPR) to 2.75% in July 2025 to support economic growth amid global uncertainties. The central bank revised its 2025 GDP growth forecast to 4.0%–4.8%, reflecting external challenges but highlighting domestic resilience.

The ringgit appreciated 5.1% against the US dollar in Q2, supported by foreign investment inflows and fiscal measures. Bank Negara also emphasized the growing role of digital services trade, which has expanded at an average annual rate of 7.0% since 2005.

• Further information is available in the Press Release:

PR Economic and Financial Developments in Malaysia.pdf

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Index.pdf

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