KUALA LUMPUR: Malaysia’s economy expanded 5.2% in the third quarter of 2025, improving from 4.4% in the previous quarter, according to advance estimates released by the Department of Statistics Malaysia (DOSM).
The advance estimates exceeded Bloomberg’s forecast of 3.4% to 4% year-on-year (y-o-y) growth.
“Economic momentum in Malaysia strengthened in 3Q25, underpinned by solid performance in all main sectors. Domestic demand continued to be the primary engine of growth, particularly in tourism-related activities during public and school holidays,” chief statistician Datuk Seri Dr Mohd Uzir Mahidin said in a statement.
He added that sustained capital investment and rising external demand further bolstered economic expansion, despite headwinds from uncertain trade policies.
“Additionally, the reduction of the Overnight Policy Rate (OPR) by 25 basis points to 2.75% and the disbursement of a one-off RM100 cash assistance to eligible Malaysians under the Sumbangan Asas Rahmah (SARA) initiative played a supportive role in stimulating domestic consumption, thereby reinforcing overall economic activity during the quarter,” he said.
In related indicators, the industrial production index (IPI) rose 4.2% in July and 4.9% in August. Manufacturing output increased 2.8% in August, supported by stronger export-oriented industries. The mining sector posted a sharp 16.8% rise, driven by higher production of crude oil, condensate and natural gas.
Sales in the wholesale and retail trade sector rose 5.0% in July and 4.9% in August, led by a 5.1% increase in wholesale trade and a 5.0% rise in retail trade.
Mohd Uzir noted that Malaysia’s trade performance fluctuated in recent months, with exports rising 6.5% in July before easing to 1.7% in August.
Imports fell 5.9% in August after a 0.6% increase in July, resulting in overall trade growth of 3.6% in July and a 2.0% decline in August.
DOSM said all sectors posted positive growth, with a turnaround in the mining and quarrying sector, while the services and manufacturing sectors remained the anchors of expansion in this quarter.
The services sector grew 5.1% in 3Q25, driven by trade, transport, and food and accommodation. Manufacturing rose 4.0% (2Q: 3.7%), led by E&E, optical products, and food processing.
The mining and quarrying sector surged 10.9% in 3Q25, rebounding from a 5.2% decline in the previous quarter, driven by higher output of natural gas and crude oil and condensate.
The construction sector maintained strong growth at 11.2% in Q3 2025, after 12.1% in the previous quarter, supported by robust civil engineering and specialised construction activities.
The agriculture sector grew marginally by 0.4% (Q2: 2.1%), lifted by the livestock sub-sector, while oil palm and rubber output declined.
