With trade tensions impacting investment and consumption, the central bank forecasted a poorer prognosis for Malaysia’s economy, which increased 4.4% in the first quarter of 2025 compared to the same period last year.
Growth during the January–March quarter was below the 4.5% increase predicted by Reuters-surveyed analysts, although it was consistent with official forecasts. In the last quarter of 2024, the GDP increased by a corrected 4.9%.
The central bank stated that continuous increases in investments, ongoing export growth, and household spending growth in the face of favourable labour market conditions and policy assistance were the main drivers of the first quarter’s economic development.
At a press conference, Bank Negara Malaysia Governor Abdul Rasheed Ghaffour stated that normalisation in motor vehicle manufacturing and sales, as well as decreased oil and gas output, had an impact on growth.
The GDP grew 0.7% in the first quarter on a seasonally adjusted basis, compared to a 0.2% decrease in the preceding quarter. Abdul Rasheed stated that a revised estimate would be released within the next month or two and that this year’s growth is anticipated to be just below the 4.5% to 5.5% predicted range.
He said that slower growth in key trading partners due to trade restrictions will impact Malaysian expenditure and investment activities, stating that “the balance of risk to the growth outlook is currently tilted to the downside.
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