KUALA LUMPUR: Malaysia's economy is riding on strong momentum from the previous year, but the government remains cautious about geopolitical risks, supply chain disruptions and inflation, says the Economy Minister.
Commenting on the Statistics Department's (DOSM) advanced gross domestic product (GDP) estimates of 5.3% for the first quarter, Akmal Nasrullah Mohd Nasir said the figures reflect a continuous expansion of domestic economic activities.
"We started from a very good year in 2025, and in that sense, the momentum was carried forward to the first quarter of this year. This growth indicates that our economic activities are continuing to expand," he said on Monday (April 20).
However, Akmal warned that global geopolitical tensions are beginning to impact energy supplies to Malaysia, with early signs of disruptions spilling over into other supply chains.
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"Although it is still in the early stages, we are continuously monitoring and evaluating the situation so that early preparations can be made by the relevant parties," he added.
On the country's broader economic outlook, the minister said the government aims to remain positive for this year while exercising caution.
"Malaysia has better resilience compared to some other places. But... if we are too complacent with what we have, it may affect the standards we have already (set).
"The process of improvement must be continuous, and we must increase our capabilities whenever there is an opportunity," he said.
Citing the energy sector as an example, Akmal Nasrullah noted that the government is taking a highly practical approach to upgrade the biodiesel mandate from B10 to B15 by focusing on operational capabilities rather than just relying on long-term facility development plans.
Addressing concerns over a recent uptick in inflation, which rose slightly from 1.4% in February to 1.7% in March, the minister acknowledged the spike but assured that it remains manageable when compared globally.
"We definitely see a slight increase, but inflation must be evaluated based on the basket of goods. The policies implemented by the government show that our inflation for March remains manageable compared to other countries," he said.
Nevertheless, Akmal Nasrullah stressed that the government is not resting on its laurels, noting that inflationary pressures extend beyond just fuel prices.
"This is not something to boast about. We know the impact is not just on fuel supply. When input materials are affected – for example, if there are issues with the cost of fertilisers – it will definitely have a knock-on effect on overall production costs," he explained.
The government has put strategic buffers in place to mitigate these risks, he added.
"For instance, we provide incentives for planters to ensure that agricultural activities can continue seamlessly. The immediate impact of this inflation might be slightly lagging because we currently have strong inventories and supplies.
"However, realistically, we expect that whenever there is an increase in input costs, whether it is energy or other raw materials, there will eventually be downstream implications," he said.
On Friday (April 17), DOSM said the Malaysian economy is expected to grow by 5.3% in the first quarter of the year.
Chief statistician Datuk Seri Mohd Uzir Mahidin said the manufacturing sector maintained positive momentum in the first two months of this year, with output expanding by 7.3% and 4.2%, respectively, largely driven by export-oriented industries.
