Fiscal Consolidation Remains On Track: Key Highlights From Malaysia’s Q1 2025 Economic Report

The Ministry of Finance (MoF) today published its First Quarter 2025 (Q1 2025) Malaysian Economy report. Issued quarterly, the report provides an overview of the country’s macroeconomic performance and fiscal position, as part of the MADANI Government’s commitment to greater transparency and accountability in the stewardship of public finances.

In this latest edition, the MoF is pleased to highlight several key milestones achieved in Q1 2025 — placing the MADANI Government firmly on track towards improved fiscal sustainability:

• The Federal Government secured a lower quarterly fiscal deficit as at end-March 2025 at RM21.9 billion (end-March 2024: -RM26.4 billion) attributed to better revenue collection and expenditure optimisation in consonance with fiscal consolidation initiatives;
• Federal Government revenue rebounded by 3% from the corresponding quarter in 2024 to RM72.1 billion, driven by higher tax collection, particularly from a surge in Sales Tax and Service Tax (SST) receipts as well as higher collection of individual income tax;
• Total expenditure contracted by 2.5% to RM94.2 billion, due primarily to lower subsidy spending following the implementation of the diesel subsidy retargeting programme as well as supported by lower global oil price. Nevertheless, targeted social assistance programmes including Sumbangan Tunai Rahmah (STR), Sumbangan Asas Rahmah (SARA), Fish Landing Incentive and Paddy Price Subsidy Scheme have been strengthened. In addition, grants to statutory bodies were optimised due to operational efficiency and effectiveness of the agencies.
• Malaysia’s real GDP grew by 4.4%, outstripping the 4.2% recorded in the corresponding quarter last year — driven by resilient domestic demand and sustained recovery across key sectors such as services, manufacturing, and construction.

The full Q1 2025 Malaysian Economy report can be accessed at the MoF’s official website: https://mof.gov.my/portal/pdf/ekonomi/suku-tahunan/.

Ministry of Finance
Putrajaya
22 May 2025