Rousing Fourth Quarter Lifts 2025 Growth Beyond Expectations

Against a volatile global backdrop, robust domestic demand powered Malaysia’s economy beyond expectations, lifting fourth-quarter (Q4 2025) GDP by 6.3% – the strongest in three years and well above the advanced estimates. This momentum pushed full-year 2025 GDP growth to 5.2% (2024: 5.1%), putting it well ahead of the Government’s official forecast range of 4% to 4.8%.

For the second year running, the MADANI Government narrowed the fiscal deficit beyond its target, to 3.7%, against the initial projection of 3.8% (2024: 4.1%).

Prime Minister and Finance Minister YAB Dato’ Seri Anwar Ibrahim noted that the strength in macroeconomic indicators was also benefitting the rakyat, in particular the lowest unemployment rate in over a decade (2.9%), and lower inflation in 2025 of 1.4% (2024: 1.8%). He said that savings from fiscal reforms were reallocated towards social assistance programs such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA), in addition to the Government’s continued commitment to public infrastructure projects that improve the rakyat’s quality of life.

“After three years of the MADANI Administration, it is increasingly clear that the articulation of a coherent policy framework, as set out in Ekonomi MADANI, followed by continued demonstration of tough reforms, has strengthened investor confidence in Malaysia. This is reflected in the ringgit’s ascent as Asia’s best-performing currency, rising direct investments, and the FTSE Bursa Malaysia KLCI’s strongest performance in seven years,” added YAB Dato’ Seri Anwar.

“While the MADANI Government recognises the progress achieved thus far, we must not rest on our laurels – not when global headwinds and intensifying trade tensions continue to shape our very lives. It is imperative that we stay the course on Ekonomi MADANI reforms, making 2026 a year to deepen our resolve to promote higher value-added economic activities, eradicate corruption, improve the rakyat’s quality of life, and enhance the ease of doing business,” said YAB Dato’ Seri Anwar.

In 2026, the economy is expected to remain on a steady trajectory, supported by resilient domestic demand, firm household consumption, and continued investment momentum. Higher tourism activity under Visit Malaysia 2026, alongside increases in the minimum wage and civil servant salaries, will further reinforce consumer spending. Budget 2026 will lay the foundation for the Thirteenth Malaysia Plan, 2026 – 2030 and other policy levers to promote inclusive and sustainable economic expansion. At the same time, the MADANI Government will continue to uphold fiscal discipline to safeguard long-term sustainability while supporting growth momentum.

Ministry of Finance
Putrajaya
13 February 2026