KUALA LUMPUR: Malaysia's economy expanded 5.2% in the third quarter (3Q) of the year, a faster rate of expansion compared to 4.4% the preceding quarter, as the country recorded higher net exports while maintaining domestic demand.
The gross domestic product (GDP), which was in line with market expectations, puts the country's economic outlook on track to achieving growth of 4% to 4.8% in 2025, said Bank Negara in its announcement.
"Malaysia’s economy grew by 4.7% in the first nine months of 2025, within the official forecast range of 4%–4.8%, reflecting our continued resilience in the face of global challenges.
"Looking ahead, global economic conditions will remain challenging and we need to keep strengthening our economic buffers to weather any headwinds that may come our way," said Bank Negara governor Datuk Sri Abdul Rasheed Ghaffour.
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On the domestic front, household spending will be supported by continued employment and wage growth, as well as income-related policy measures.
Additionally, investment activity will be sustained by progress of infrastructure projects, further realisation of approved private investments, and the implementation of national master plans.
The central bank noted that export growth is expected to be impacted by tariffs and moder moderate external demand. However, it would be supported by continue demand for electrical and electronic goods, inbound tourism and recovery in mining-related exports.
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In 3Q, headline inflation was stable at 1.3% while core inflation increased to 2%, up from 1.8% in the preceding quarter.
Bank Negara said the the higher core inflation was offset by declines in selected administered prices such as electricity and diesel, which were lower in 3Q in line with the recent electricity tariff restructuring and moderate global cost conditions.
Meanwhile, the ringgit remained broadly stable in 3Q with a marginal appreciation of 0.5%. "The US Federal Reserve’s easing of monetary policy in September coupled with expectations of further rate cuts amid growing concerns about the US economy’s outlook, has supported the ringgit during the quarter," said Bank Negara.
The central bank also acknowledged the announcement of trade agreements between the US and several of its trading partners, including Malaysia, which have helped ease tariff-related uncertainties and improve sentiment, further supporting the ringgit’s performance.
Year-to-date, the local currency has strengthened 8.2% against the greenback.
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