Malaysia's 4.4% GDP growth in Q1 propelled by 6% spurt in March
PETALING JAYA: Malaysia's gross domestic product (GDP) grew by 4.4% in the first quarter of 2025 compared to 4.9% in the fourth quarter of 2024, according to the Department of Statistics.
Quarter-on-quarter seasonally adjusted, Q1 2025 GDP rebounded to 0.7% (Q4 2024: -0.2%). The monthly economic performance grew by 3.5% and 3.6% in January and February, respectively, before accelerating to 6% in March.
Chief Statistician of Malaysia Datuk Seri Dr Mohd Uzir Mahidin said, 'This quarter's economic expansion was supported by steady performance on the supply side, notably in the services, manufacturing and construction sectors. This reflects a healthy pace of domestic production and a well-diversified industrial base despite global challenges. On the demand side, consumer and business sentiment remained positive, with spending boosted by festive celebrations, travel activities and ongoing investments, particularly in construction-related projects. The salary increment for civil servant under Sistem Saraan Perkhidmatan Awam along with the rollout of the first phase of Sumbangan Tunai Rahmah further supported the overall economic momentum.'
In terms of sectoral performance, the services sector expanded by 5% in the first quarter of 2025 (Q4 2024: 5.5%), driven by the wholesale and retail trade sub-sector at 4.3%. This growth was underpinned by increases in the wholesale (5.4%) and retail (5.2%) segments, while motor vehicles declined (-3.7%) in this quarter. Furthermore, transportation and storage and business services sub-sectors demonstrated strong growth of 9.5% and 7.7%, respectively, benefiting from continued demand in freight segments as well as professional and business support services.
On a quarter-on-quarter seasonally adjusted basis, the services sector grew by 0.7% (Q4 2024: 0.3%).
The manufacturing sector moderated to 4.1% (Q4 2024: 4.2%) in the first quarter of 2025, supported by sustained external demand for electrical and electronic products, emphasising the country's strategic role in global supply chains. Nonetheless, domestic-oriented industries softened, influenced by the transport equipment, other manufacturing and repair following lower production in motor vehicles and transport equipment. On a quarter-on-quarter seasonally adjusted basis, the manufacturing sector increased by 1.4% (Q4 2024: -1.2%).
The construction sector grew by 14.2% (Q4 2024: 20.7%), marking its fifth consecutive quarter of double-digit growth. The sector's robust performance was led by non-residential buildings, which surged by 21.4%, spurred by data centre projects particularly in Johor and industrial facilities such as factories.
This was followed by specialised construction activities (17.2%), residential buildings (16.6%) and civil engineering (5.2%). Quarter-on-quarter seasonally adjusted, this sector increased by 1.1% (Q4 2024: -0.2%).
In addition, the agriculture sector rebounded to 0.6% (Q4 2024: -0.7%), attributed to strong performance in the marine fishing sub-sector at 10.3%.
Furthermore, the other agriculture sub-sector recorded a 2.2% increase, supported by production of vegetables and fruits. Nonetheless, the oil palm sub-sector declined by -3.1% following lower yields of fresh fruit bunches. This sector rebounded to 1.1% (Q4 2024: -2.8%) quarter-on-quarter seasonally adjusted.
The mining and quarrying sector declined further in the first quarter to -2.7% (Q4 2024: -0.7%), influenced by contractions in the natural gas and crude oil and condensate sub-sectors at -2.2% and -4.6%, respectively. The downturns reflect subdued output across key upstream activities. In terms of quarter-on-quarter seasonally adjusted, this sector posted a decline of -1.9%, reversing from 4% growth recorded in the previous quarter.
Mohd Uzir said, 'Private final consumption expenditure grew by 5%, easing slightly from 5.3% in the preceding quarter. The growth was driven by spending in transport (9.1%), restaurants and hotels (13.2%), and food and non-alcoholic beverages (4.3%), reflecting heightened activity related to travel, tourism and festive seasons. On a quarter-on-quarter seasonally adjusted basis, private final consumption expenditure rose by 1.5% (Q4 2024: 0.9%).'
Gross fixed capital formation (GFCF), or investment in fixed assets, increased by 9.7% from 11.8% in the previous quarter, attributed to the continued strength in the structure component, which grew by 13.4%. The sustained performance reflects ongoing development activity in residential and non-residential construction projects across the country. Additionally, investments in machinery and equipment and other assets expanded by 5.4% and 7.2%, respectively.
From a sectoral perspective, both the public and private sectors contributed to the strong investment growth this quarter. On a quarter-on-quarter seasonally adjusted, GFCF recorded a marginal improvement of 0.8% (Q4 2024: -0.03%).
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