Malaysia GDP Grows 4.4% Q1 Amid Slowing Expansion

Malaysia's economy grew by 4.4% in the first quarter of 2025, confirming initial estimates and marking the slowest growth rate in a year. The expansion was supported by resilient household spending, a strong labor market, and steady investment activity, although export growth slowed due to lower mining exports, partially offset by stronger electrical and electronics exports and tourism. Despite positive domestic demand, the growth rate represents a slowdown from the previous quarter's revised 4.9% expansion and reflects ongoing challenges including rising trade tensions and policy uncertainties. Bank Negara Malaysia highlighted that these trade developments, particularly U.S. tariffs announced in April, are creating uncertainty that could affect Malaysia's economic outlook. As a small, open economy, Malaysia is expected to face direct and indirect impacts from these global trade dynamics, leading to a likely downward revision of the year's growth forecast. The central bank plans to release an updated official growth forecast once there is greater clarity on trade negotiations and their outcomes.