Strong Domestic Demand Drives 6.3% GDP Growth, Highest in Three Years – PM
PUTRAJAYA: Malaysia’s economy posted a robust 6.3 per cent growth in the fourth quarter of last year, marking the strongest quarterly performance in three years and surpassing earlier estimates, driven primarily by resilient domestic demand.
Prime Minister Anwar Ibrahim said the strong quarterly momentum lifted full-year 2025 GDP growth to 5.2 per cent, slightly higher than 5.1 per cent recorded in 2024 and above the government’s official projection range of four to 4.8 per cent.
The Prime Minister, who also serves as Finance Minister, noted that the encouraging performance reflects Malaysia’s economic resilience despite ongoing global uncertainties.
Fiscal Deficit Narrows for Second Consecutive Year
Anwar highlighted that fiscal consolidation efforts have continued to bear fruit, with the fiscal deficit reduced to 3.7 per cent in 2025 compared to 4.1 per cent in 2024, outperforming the initial target of 3.8 per cent.
He described the achievement as a testament to sustained fiscal reforms and disciplined financial management over the past two years.
The improvement in macroeconomic fundamentals, he added, has translated into tangible benefits for the rakyat, strengthening both investor confidence and domestic stability.
Lowest Unemployment in Over a Decade
Malaysia recorded its lowest unemployment rate in more than ten years at 2.9 per cent in 2025, while inflation eased to 1.4 per cent from 1.8 per cent the previous year.
According to Anwar, the figures indicate that economic expansion has been accompanied by improved labour market conditions and price stability.
Savings generated from fiscal reforms have been channelled into social assistance programmes such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA), alongside continued investments in public infrastructure projects aimed at enhancing overall living standards.
Investor Confidence Strengthens
Anwar said the clarity of policy direction under the Ekonomi MADANI framework, coupled with consistent reform implementation, has reinforced investor trust in Malaysia over the past three years.
He pointed to the strengthening of the ringgit as one of Asia’s best-performing currencies, rising foreign direct investment inflows, and the FTSE Bursa Malaysia KLCI reaching a seven-year high as key indicators of renewed confidence.
Nevertheless, he cautioned against complacency, noting that global headwinds and intensifying trade tensions remain significant risks.
2026 to Focus on High-Value Growth
Looking ahead, Anwar stressed that 2026 must serve as a year to deepen structural reforms and promote higher value-added economic activities.
Anti-corruption initiatives, efforts to improve public welfare and measures to enhance ease of doing business will remain central priorities.
The economy is projected to stay on a stable trajectory this year, supported by resilient domestic consumption, sustained investment momentum and stronger tourism activity in conjunction with Visit Malaysia 2026.
The upcoming Budget 2026, he said, will lay the foundation for the 13th Malaysia Plan (2026–2030), aiming to ensure inclusive and sustainable growth while maintaining fiscal discipline to safeguard long-term economic sustainability.
-wilayah.com.my
