Malaysia observes positive economic growth in Jan 2025

Specific sectors that contributed to growth were the services sector (5.4%), manufacturing sector (4.2%), construction sector (17.5%), agriculture sector (3.1%) and the mining & quarrying sector (0.9%).

The Department of Statistics Malaysia (DOSM) has released the Malaysian Economic Statistics Review (MESR), Volume 3/2025, which focused on recent statistics from January 2025 and forthcoming statistics for February 2025.

Based on the review, Malaysia’s economy grew from 3.6% in 2023 to 5.1% in 2024, with all major sectors recording an improvement in performance. Chief Statistician Malaysia, Dato’ Sri Dr. Mohd Uzir Mahidin also noted the specific sectors that contributed to this growth were the services sector (5.4%), manufacturing sector (4.2%), construction sector (17.5%), agriculture sector (3.1%) and the mining & quarrying sector (0.9%).

Looking at the start of 2025, the country’s Industrial Production Index (IPI) rose by 2.1% year-on-year due to the 3.7% increased contributed by the Manufacturing sector. Comparing on a monthly basis, the increase was slower than the 5.8% growth recorded in December 2024. Inversely, the IPI for the mining and electricity sectors fell by 3.1% and 0.1% respectively. As a whole, the overall IPI fell by 0.4% from the previous month.

Following the upward trend, the manufacturing sector saw a 3.5% increase in sales value back in January 2025, reaching RM158.1bn. This growth was supported by the food, beverages and tobacco sub-sector (5.7%), electrical and electronic products (7.3%), and non-metallic mineral products, basic metal and fabricated metal products (2.1%). The IPI for these fell slightly by 0.2% when compared to the previous month.

Next, the wholesale & retail trade sector grew by 4.6% from January 2024 which was contributed by Retail trade and Wholesale trade of 8.2% and 4.9% respectively. However, the overall sales fell by 2.1% once again when compared against the previous month of December 2024 due to the sharp fall in sales of motor vehicles (19.4%).

Moving on to the economic conditions of Malaysia, inflation rate remained stable at 1.7% in January 2025 – the same rate recorded in December 2024. Prominent price increases were seen in various sectors such as:

• Restaurant and accommodation services
• Personal care
• Social protection and miscellaneous goods and services
• Recreation
• Sport and culture
• Education
• Health
• Transport

In the trade sector, expansion continued in early 2025, supported by resilient export and import activities. The total trade in January grew by 3.1% year-on-year to RM241.9bn which showed that demand across all key sectors still sustained. Export growth also remained positive with an increase of 0.3%, amounting to RM122.8bn. This was contributed by the higher shipments of Electrical and electronic products, palm oil-based goods, and rubber gloves. Import growth exceeded the exports as they rose to 6.2% with a value of RM119.2bn as the rising demand for Electrical and electronic products and aircraft equipment were the main contributing factors to this steep increase. Despite this, trade activities still fell by 6.2% on a monthly basis from December 2024.

Finally, looking at Malaysia’s economic prospects, Dato' Sri Dr. Mohd Uzir Mahidin shared once more that Malaysia’s Leading Index (LI) signalled a positive economic growth in January 2025 with a recording of a 0.4% year-on-year increase. This would mark 14 consecutive months of expansion. However, it is expected that the economy will still see decline of 1.2% on a monthly basis as most components weaken. The overall LI falling below 100 points reflect the cautious economic prospects of Malaysia while global challenges continue to exert its pressures.

Despite these pressures, Dato' Sri Dr. Mohd Uzir Mahidin said that DOSM will "continue to monitor economic developments and deliver timely analysis to give a clearer picture of the country's growth trajectory in 2025."

READ MORE: Malaysia’s labour force sees improvements, recording 16.68mn employed persons in January 2025: DOSM