PETALING JAYA: Malaysia’s economy grew by 5.2% in 2025, surpassing earlier forecasts of 4% to 4.8%, Bank Negara Malaysia (BNM) said today.
The country also posted an expansion of 6.3% in the fourth quarter, faster than the 5.4% recorded in the third quarter.
In a statement today, BNM attributed the growth to strong domestic demand, with higher household spending and investment activity.
Household spending was supported by robust labour market conditions and government income-support measures, while investment surged on the back of machinery and equipment spending, particularly for data centres, and ongoing multi-year projects across the public and private sectors.
Exports also strengthened, led by electrical and electronic goods, while services exports benefited from inbound tourism and ICT-related activities.
Inflation remained moderate, with headline inflation stable at 1.3% and core inflation rising slightly to 2.3%. Lower electricity and petrol prices helped offset increases in other core items.
The central bank predicted that the growth momentum would continue this year, supported by resilient domestic demand, steady exports and a tourism rebound following the Visit Malaysia Year 2026 campaign.
Headline and core inflation are projected to remain moderate.
“The domestic policy reforms implemented in 2025, such as the sales and service tax expansion and targeted RON95 subsidy rationalisation, are projected to result in only modest effects on inflation in 2026,” BNM said.
