Malaysia’s economy posted a robust performance in the third quarter of 2025, recording a 5.2% year-on-year GDP growth, an improvement from 4.4% in the previous quarter, driven primarily by stronger household spending and a surge in tourism-related activities.
According to the Department of Statistics Malaysia (DOSM), the economy also grew 2.4% quarter-on-quarter (seasonally adjusted), reflecting continued momentum in domestic demand. Monthly data showed consistent expansion, with GDP rising 5.2% in July, 5.0% in August, and 5.3% in September.
For the first three quarters of the year, Malaysia recorded 4.7% growth, slightly below the 5.2% achieved in the same period last year.
Chief Statistician Dato' Sri Dr. Mohd Uzir Mahidin highlighted that all major sectors registered positive growth, with notable improvements in Services, Manufacturing and Mining & Quarrying.
Services Sector
The country’s largest economic contributor expanded 5.0%, underpinned by:
- Wholesale & retail trade
- Transportation & storage
- Food & beverage and accommodation fuelled by school holidays and travel demand
The Services sector grew 1.7% on a quarterly adjusted basis.
Manufacturing Sector
Manufacturing improved to 4.1%, driven mainly by export-oriented industries.
- Electrical, electronic & optical products surged
- Domestic industries such as vegetable & animal oils and basic metal products showed moderate growth
Quarterly growth stood at
Mining & Quarrying Sector
The sector rebounded strongly by 9.7%, ending four consecutive quarters of contraction.
- Natural gas output soared
- Crude oil & condensate rose
On a quarterly basis, growth accelerated
Construction Sector
The sector maintained strong double-digit momentum, rising 11.8%, supported by:
- Civil engineering
- Specialised construction activities
- Quarterly growth remained steady at
Agriculture Sector
Agriculture grew modestly by 0.4%, weighed down by contractions in oil palm and rubber, despite improvements in other agriculture and livestock.
Private Consumption Remains the Main Economic Driver
Private final consumption accounting for 61.4% of GDP continued to support growth, increasing 5.0%.
Strength was led by:
- Restaurants & hotels
- Transport spending
Holiday-related spending and improved affordability from government initiatives such as Sumbangan Asas Rahmah (SARA) boosted consumer purchasing power.
However, on a quarterly basis, private consumption grew more moderately at 0.5%.
Investment and Public Spending Strengthen
Gross fixed capital formation (GFCF) rose 7.4%, driven largely by:
- Structure investments aligned with broader construction activity
- Machinery & equipment
- Other assets
Both public and private investments contributed positively. Government consumption grew 7.1%, reflecting higher spending on supplies and services.
Malaysia’s trade dynamics improved as exports grew 1.4%, outpacing import growth of 0.4%. As a result, net exports surged 17.7%, a significant recovery from the 72.6% decline in the previous quarter.
In a separate milestone, Malaysia achieved the No. 1 position globally in the Open Data Inventory (ODIN) 2024/25, outperforming 198 countries and marking a remarkable leap from its 67th position in 2022/23.
The latest figures point to sustained domestic resilience supported by steady employment, stable inflation, and policy measures that encourage spending and investment. With strong performance across major sectors and a continued recovery in tourism, Malaysia is expected to maintain positive growth momentum heading into the final quarter of 2025.
Shahriena Shukri is a journalist covering business and economic news in Malaysia, providing insights on market trends, corporate developments, and financial policies. More about Shahriena Shukri.
