KUALA LUMPUR: Malaysia’s economy grew 4.4 per cent in the first quarter of 2025 from a year earlier, below market expectations but in line with government estimates, data showed on Friday (May 16).
Economists surveyed by Reuters had forecast annual gross domestic product growth would come in at 4.5 per cent in the January to March period.
On a quarter-on-quarter seasonally adjusted basis, first quarter GDP expanded 0.7 per cent vs a 0.2 per cent contraction in the previous quarter.
The economy grew a revised 4.9 per cent in the final quarter of 2024.
The central bank said first-quarter economic growth was driven by sustained household spending growth amid positive labour market conditions and policy support, as well as steady expansion in investments, and continued export growth.
“Growth was affected by lower oil and gas production, and normalisation in motor vehicle sales and production,” Bank Negara Malaysia Governor Abdul Rasheed Ghaffour said at a press conference.
Growth in 2025 is expected to be slightly lower than the 4.5 to 5.5 per cent forecast range, Abdul Rasheed said, adding a new estimate would be announced in the next month or two.
“The balance of risk to the growth outlook is currently tilted to the downside,” Abdul Rasheed added.
Last month, the central bank said it would have to lower this year’s forecast economic growth range of 4.5 per cent to 5.5 per cent due to the global trade war.
Prime Minister Anwar Ibrahim said earlier this month that the suspension of most of the US tariffs until July meant the economic impact was manageable for now, but Malaysia was unlikely to meet its growth forecast this year.
Malaysia is facing a 24 per cent tariff rate on its exports to the US from July, unless it is able to negotiate a reduction of the levy.
