Malaysia's economy grows 4.4% y/y in Q2, slightly below forecast
Economists surveyed by Reuters had forecast annual gross domestic product growth would come in at 4.5 per cent in the April-to-June period, in line with the government's advance estimate released last month. In the first quarter, the economy also grew an annual 4.4 per cent.
The central bank said second-quarter growth was driven by robust household spending and positive labour market conditions, but said forecasting was challenging amid continued uncertainty from U.S. tariffs.
"Growth could move in different directions... we are operating in a different environment where changes happen very quickly," Bank Negara Malaysia Governor Abdul Rasheed Ghaffour told a press conference.
A 19 per cent tariff on Malaysian exports to the United States took effect earlier this month, although some goods remain exempt pending a review of U.S. laws. Malaysia's exports declined in annual terms in May and June.
Export growth is expected to be moderate in the second half of 2025, though there would be support from demand for electrical and electronic goods and higher tourist arrivals, Abdul Rasheed said.
Last month, the central bank lowered its growth forecast for 2025 to a range of 4 per cent to 4.8 per cent from 4.5 per cent to 5.5 per cent due to global tariff uncertainties and shifting trade policies.
The bank also cut interest rates for the first time in five years in July to "pre-emptively preserve" the export-oriented economy's growth.
Inflation has moderated in recent months, with the consumer price index rising 1.1 per cent from a year earlier in June, its slowest pace in more than four years.
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