Malaysia’s economy expanded by +5.2% YoY in 3Q25 (2Q25: +4.4%), well above consensus of +4.2%. Growth was supported by rebounds in mining and firmer manufacturing, while services remained the main anchor of domestic momentum.
Despite the stronger 3Q25 print, questions remain over the sustainability of the recent export momentum, as renewed US-China trade tensions, the pending US court ruling on tariff legality, reciprocal tariffs and further sectoral tariffs could shift the trade outlook.
We expect export and manufacturing growth to moderate as the impact of tariffs gradually filters through into 2026, even as domestic demand remains supported by a resilient labour market and ongoing policy support.
Given the robust year-to-date growth of +4.7% YoY, we have revised our 2025 GDP growth forecast upwards to +4.5% (previously +4.2%). For 2026, we maintain our projection at +4.1%, reflecting a softer external outlook and the anticipated base effect from this year’s stronger growth momentum.
3Q25 GDP surprised on the upside
Malaysia’s economy expanded by +5.2% YoY in 3Q25 (2Q25: +4.4%), according to the advance GDP estimate released by the Department of Statistics Malaysia (DoSM), well above Bloomberg consensus of +4.2%. The robust growth defied earlier market expectations of a slowdown following the implementation of US tariffs. The final GDP data will be released on 14 November and will provide further clarity on the expenditure breakdown.
Strength in mining and manufacturing
All supply-side components posted positive growth during the quarter. Key highlights were the strong rebounds in mining and firmer manufacturing, which helped lift overall momentum. Mining rebounded sharply to +10.9% YoY (2Q25: -5.2%), reflecting a recovery in crude oil and natural gas output post-maintenance. Manufacturing growth strengthened to +4.0% (2Q25: +3.7%), supported mainly by the E&E segment amid steady external demand. Services remained the main growth anchor at +5.1% (2Q25: +5.1%), driven by wholesale and retail trade, signalling firm consumer spending momentum. Construction maintained its double-digit pace at +11.2% (2Q25: +12.1%) on sustained private investment in data centres and infrastructure. Agriculture moderated to +0.4% (2Q25: +2.1%) on weaker palm oil and rubber output.
Easing concerns but not out of the woods yet
The stronger 3Q25 GDP print, particularly from manufacturing, came as a positive surprise and indicates that Malaysia’s economy is holding up better than expected in the early phase of US reciprocal tariffs. Nonetheless, as highlighted in our latest External Trade Report, questions remain over the sustainability of the recent export momentum. The renewed US-China trade tensions, ongoing trade negotiations with the US, the pending US Supreme Court ruling on tariff legality and the potential imposition of further sectoral tariffs remain key moving parts that could alter Malaysia’s trade outlook in either direction.
While recent trade data suggest that a sharp deterioration in the external sector is unlikely, we expect export and manufacturing growth to gradually moderate as the impact of reciprocal tariffs filters through into 2026. Domestic demand, supported by a resilient labour market, firm wage growth, and ongoing policy support, is expected to remain the key anchor for overall economic expansion.
Revised Up 2025 Growth Projection
Given the robust year-to-date performance of +4.7% YoY, we have revised our full-year 2025 GDP growth forecast upwards to +4.5% (previously +4.2%). For 2026, we maintain our projection at +4.1%, reflecting a softer external outlook and the anticipated base effect from this year’s stronger growth momentum.
Disclaimer
The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.
Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.
Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.
| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.183360 | 4.212600 |
| EUR | 4.873028 | 4.878308 |
| CNY | 0.589871 | 0.590472 |
| HKD | 0.538522 | 0.542295 |
| SGD | 3.220053 | 3.242721 |