Malaysia’s economy expanded by 6.3% in the fourth quarter of 2025. The performance improved from 5.4% in the third quarter, supported by stronger activity across all major sectors and sustained domestic demand.
On a seasonally adjusted basis, the economy grew by 0.8% compared to 2.7% in the previous quarter.
For the full year, Malaysia’s Gross Domestic Product (GDP) rose 5.2% in 2025, with the economy valued at RM2.02 trillion at current prices and RM1.74 trillion at constant prices .
Gross national income per capita increased by 4.1% to RM57,070, up from RM54,804 in 2024.
The Services sector remained the main driver of the economy, expanding 6.3% in Q4 2025, up from 5.5% in the previous quarter .
Growth was broad-based across sub-sectors:
- Wholesale and retail trade grew 5.7%
- Information and communication rose 8.9%
- Transportation and storage increased 8.7%
For the full year, the Services sector expanded by 5.5%, slightly higher than 5.3% in 2024.
The Manufacturing sector recorded stronger growth of 6.1% in the fourth quarter, compared to 4.1% in Q3.
The improvement was mainly driven by:
- Electrical, electronic and optical products, which surged 12.7%
- Vegetable and animal oils & fats and food processing, up 10.0%
- Non-metallic mineral products, basic metal & fabricated metal products, rising 4.9%
Overall, the Manufacturing sector grew 4.5% in 2025.
The Agriculture sector expanded significantly by 5.4% in Q4 2025, compared to just 0.1% in the previous quarter.
The strong performance was largely supported by the Oil palm sub-sector, which surged 16.2% due to better fresh fruit bunch production.
Livestock and other agriculture activities also recorded moderate growth .
Meanwhile, the Construction sector strengthened further, growing 11.0% in the fourth quarter.
Non-residential buildings and specialised construction activities posted double-digit expansion, contributing significantly to the sector’s performance. For the full year, construction expanded 12.2%.
The Mining and quarrying sector recorded a slower expansion of 2.0% in Q4 2025 . Growth was supported by a 6.1% increase in crude oil and condensate production, although natural gas output declined by 1.0%.
For the full year, the sector grew marginally by 0.7%.
On the demand side, Malaysia’s growth continued to be supported by private consumption and investment.
Final consumption expenditure rose 5.8% in Q4 2025, up from 5.4% in the previous quarter.
- Private final consumption expenditure increased 5.3%, driven by higher spending on transport, restaurants & hotels, and communication.
- Government final consumption expenditure expanded 8.0% due to higher spending on supplies and services.
For 2025 overall, private consumption grew 5.2%, while government spending rose 6.6%.
Investment Accelerates
Gross Fixed Capital Formation (GFCF) grew at a faster pace of 9.3% in Q4 2025, compared to 7.4% in the previous quarter.
Investment in:
- Structures rose 10.1%
- Machinery and equipment surged 9.2%
- Other assets increased 3.7%
Private investment remained the main contributor, accounting for 66.0% of total GFCF, while public investment also strengthened. For the full year, GFCF expanded 9.6%.
Exports grew 3.9% in the fourth quarter, improving from 1.7% in Q3, supported by better exports of goods and services.
Imports accelerated more sharply, rising 7.9%, driven by increased imports of goods.
For 2025 as a whole, exports and imports moderated to 3.1% and 4.6% respectively, lower than the stronger expansion recorded in 2024.
Malaysia’s fourth-quarter performance capped off a year of steady expansion, supported by resilient domestic demand, stronger manufacturing output and sustained services activity. Construction and investment remained firm, while agriculture saw a notable rebound.
With GDP growth reaching its fastest pace in three years during the final quarter, Malaysia entered 2026 with positive economic momentum.
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
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