Malaysia's GDP Growth Slows to 4.4% in Q1 2025 Amid Trade Tensions

Malaysia's economy grew by 4.4% in the first quarter of 2025, falling short of forecasts and marking a third consecutive period of slowing growth, largely due to weaker performance in manufacturing, construction, and a contraction in mining and quarrying. The services sector remained a primary driver of growth, though its pace has also decelerated. The economic outlook is increasingly uncertain as the country faces new US tariffs and escalating global trade tensions, which could further dampen GDP growth to between 3.5% and 4% if conditions worsen. Despite these challenges, Malaysia's domestic economy has shown resilience, supported by strong consumer spending, steady investment, and government initiatives under frameworks such as Economy Madani. Some analysts anticipate potential policy easing by Malaysia's central bank if trade headwinds persist, mirroring moves by other Southeast Asian nations. Policymakers are considering revising the official 2025 GDP forecast in light of these developments while emphasizing efforts to maintain investor confidence and market access.