1Q GDP growth in line with advance estimates, higher than previous corresponding quarter- MOF

The Star

16-05-2025

Finance Minister II Datuk Seri Amir Hamzah Azizan — IZZRAFIQ ALIAS/The Star
KUALA LUMPUR: A rousing performance across key economic sectors lifted Malaysia's gross domestic product (GDP) by 4.4 per cent in the first quarter of 2025 (1Q 2025), in line with the GDP advance estimates and higher than the 4.2 per cent growth recorded in 1Q 2024.
The Ministry of Finance (MOF) said the GDP growth in 1Q 2025 was buoyed by the services (5.0 per cent), manufacturing (4.1 per cent), and construction (14.2 per cent) sectors.
It said stronger consumer spending during the Chinese New Year and pre-Hari Raya festive periods, the implementation of the new minimum wage in February 2025, and the recent increase in civil servant salaries further fuelled the growth momentum.
"Private consumption, undergirding Malaysia's economy, grew 5.0 per cent in 1Q 2025.
"This was supported by encouraging labour market performance with a decline in the unemployment rate to 3.1 per cent and benign inflation at 1.5 per cent - both marking the lowest levels recorded under the MADANI administration,' Finance Minister II Datuk Seri Amir Hamzah Azizan said in a statement today.
He said that investments continued their growth momentum in 1Q 2025, recording a 9.7 per cent increase, reflecting the positive response from global investors to the MADANI government's pro-development policies and a strong emphasis on sustainability as outlined in key national policy frameworks, including the National Energy Transition Roadmap (NETR).
MOF said the government is also actively working to attract more high-quality foreign direct investment (FDI) to stimulate growth while maintaining a dynamic ecosystem after recording the decade-high domestic investment in 2024.
It said the government would continue to closely monitor both domestic and global economic developments and is prepared to implement responsive and appropriate policy measures to ensure that Malaysia's economic growth remains consistent, sustainable, and inclusive for the well-being of all segments of society.
"The government remains committed to maintaining investor confidence and protecting domestic industries amid an increasingly complex global economic landscape,' it said.
MOF noted that the government acknowledged the presence of downside risks to the official 2025 GDP growth forecast of 4.5 per cent to 5.5 per cent, owing to tapering global demand, heightened geopolitical tensions, and the rising prevalence of protectionist trade policies, particularly the recent announcement of reciprocal tariffs by the United States (US).
"The MADANI government will revise the 2025 GDP forecast once the reciprocal tariff situation stabilises and greater clarity emerges,' it said.
In the meantime, MOF said the government would implement several mitigation measures to further strengthen the country's fundamentals including efforts to boost domestic direct investment (DDI).
It added that government-linked investment companies (GLICs) have committed to invest a combined RM25 billion in DDI this year under the GEAR-uP programme.
Meanwhile, MOF said the government will continue to engage the US in bilateral trade discussions while also leveraging multilateral platforms such as the ASEAN and the Regional Comprehensive Economic Partnership (RCEP) to uphold a fair and conducive global trade environment,' MoF said.
It said that the government would redouble efforts to diversify export markets and secure new trade agreements to mitigate the impact of global trade disruptions.
"These efforts have already borne early fruit in 2024, as reflected in increased investment and exports to non-traditional markets such as Egypt, Pakistan, and Cambodia, alongside stronger export growth to other ASEAN member states,' it said.
MOF added that the government will also work to accelerate the implementation of the MADANI Economy reform agenda, focusing on fiscal sustainability, strengthening Malaysia's economic value chains, protecting the welfare of the broader population through social safety nets, and unlocking the potential of the local talent pool. - Bernama