Malaysia economy likely grew at fastest pace in over a year in Q4 - Reuters poll
FILE PHOTO: A view of Kuala Lumpur's skyline, in Malaysia July 31, 2025. REUTERS/Hasnoor Hussain/File Photo
BENGALURU, Feb 10 : Malaysia's economy likely expanded at its fastest pace in more than a year in the final quarter of 2025, supported by strong domestic demand and investment as well as steady export growth, a Reuters poll of economists showed.
The economy was forecast to have grown 5.7 per cent from a year earlier in the fourth quarter, according to 18 economists polled between February 3 and 10, accelerating from 5.2 per cent in the third quarter.
That aligns with advance estimates showing most key sectors, including services and manufacturing, grew faster in the October-to-December period than in the third quarter, even though Malaysia faces 19 per cent tariffs on goods exported to the U.S.
"The standout has been that growth is firing on all cylinders," said Lavanya Venkateswaran, senior ASEAN economist at OCBC Bank.
She added that exports, private and public investment, government spending and household consumption were all supporting growth, reflecting stronger economic fundamentals since 2023.
Economists said net exports also made a positive contribution to growth in the final quarter, with official data showing Malaysia's trade surplus widened to 19.3 billion ringgit ($4.92 billion) in December.
Domestic demand remained firm, with official data showing private consumption rose steadily in the first three quarters of 2025, while retail sales data pointed to a continuation of that trend in the fourth quarter.
Malaysia's performance contrasts with several other Asian nations that are grappling with weak domestic demand, subdued investor confidence and volatile currencies - as trade-related uncertainties linger.
A separate Reuters poll showed Malaysia's economy is projected to grow 4.5 per cent this year, at the upper end of the government's 4.0 per cent to 4.5 per cent forecast range. Meanwhile, its central bank is expected to keep its benchmark interest rate on hold in 2026, with some economists expecting the next possible move will be a hike rather than a cut.
"Malaysia's growth outlook remains solid, underpinned by a strong investment pipeline and a healthy labour market," said Krystal Tan, an economist at ANZ.
"Our base case is for the policy rate to stay at 2.75 per cent throughout 2026. But the risk to this view is if the Bank Negara Malaysia (BNM) reverses the pre-emptive 25 bps rate cut implemented in July 2025, particularly if U.S. semiconductor tariffs are not expanded."
($1 = 3.9210 ringgit)
