KUALA LUMPUR: Malaysia’s economy grew 6.3% in the fourth quarter of 2025 from a year earlier, its fastest pace in three years and surpassing expectations, government and central bank data showed on Friday.
Economists surveyed by Reuters and advance estimates released by the government had forecast annual gross domestic product growth would come in at 5.7% in the October to December period.
Growth was revised upwards to 5.4% from 5.2% in the third quarter.
Full-year 2025 economic growth was 5.2%, a notch above the 5.1% expansion the previous year and exceeding official projections of between 4% and 4.8%, the data showed.
Growth in 2025 was driven by strong domestic demand and exports, assisted by strong investment growth, the central bank said in a statement.
“This growth momentum is expected to continue in 2026, supported by resilient domestic demand and exports,” Bank Negara Malaysia Governor Abdul Rasheed Ghaffour said.
The government and central bank expect the economy to grow between 4% and 4.5% this year, amid persisting uncertainties about the impact of US tariffs.
Malaysia faces a 19% levy on goods exported to the United States.
The central bank kept its key interest rate unchanged at 2.75% during its first policy review of 2026 last month, citing steady economic growth, modest inflation, and a positive outlook for the year.
Bank Negara Malaysia last lowered its main policy rate in July 2025, in a preemptive move after US President Donald Trump imposed steep tariffs on most trading partners.
Since then, trade-related uncertainty has eased and the tariff rate on Malaysia was reduced to a level broadly in line with other Asian peers. Headline and core inflation averaged 1.4% and 2%, respectively, in 2025, the central bank said, adding that inflation is expected to remain moderate this year.
Malaysia could raise its economic growth outlook for this year, its second finance minister said earlier this month, following a string of recent positive signals.
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