Malaysia's economy grew 4.5% y/y in Q2, advance estimates show
In the first quarter, gross domestic product growth grew an annual 4.4%, slowing from the end-2024 rate as lower oil and gas production tempered strong household spending and a steady expansion in investments.
Growth in the April-to-June period was buoyed by resilient consumer demand despite global headwinds, the statistics department said, flagging economic uncertainties driven by U.S. President Donald Trump's tariff drive.
"Overall... the external components of the economy remained challenging, weighed down by surrounding tariff developments and continued global political uncertainties," Chief Statistician Mohd Uzir Mahidin said in a statement.
The services sector remained the primary driver of economic growth in the quarter, growing 5.3% on-year, while the manufacturing sector rose 3.8%, Mohd Uzir said.
Trade activity slowed in May, amid weaker demand in exports, he added.
Separate data released on Friday showed exports falling for the second month in a row in June, declining 3.5% from a year earlier after dipping by 1.1% the previous month.
Malaysia's economy grew 5.1% in 2024, driven by domestic demand, record approved investments, and robust exports.
Prime Minister Anwar Ibrahim said in May that this year's growth target of between 4.5% and 5.5% was unlikely to be met in the aftermath of the U.S. tariffs.
The central bank, which earlier this month cut interest rates for the first time in five years, has also said it would have to lower its growth forecast amid risks to the export-oriented economy from tariffs and geopolitical tensions.
Malaysia faces a 25% tariff on its exports to the United States, unless it can reach a trade deal before August 1.
Final second-quarter GDP figures are expected to be released on August 15.
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