Malaysia Economic Outlook
A dynamic and diversified economy:
Malaysia is one of Southeast Asia’s most developed and diversified economies, benefiting from strong manufacturing, services, and commodities sectors. It has historically been an export-driven economy, with key industries including electronics, palm oil, petroleum, and rubber. The country has positioned itself as a key player in global supply chains, particularly in semiconductor production, where it accounts for a significant share of global chip assembly and testing.
Manufacturing and trade powerhouse:Malaysia is highly integrated into global trade, with exports accounting for over 60% of GDP. Electronics and electrical products make up the largest share of exports, with major trading partners including China, the U.S., and Singapore. The country is also a key member of the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which strengthen its trade linkages. However, global demand fluctuations and U.S.-China trade tensions pose risks.
Services and domestic growth:While manufacturing dominates exports, services have grown in importance, making up more than half of GDP. Kuala Lumpur has developed into a regional financial hub, and Malaysia’s tourism industry is a key contributor to employment. However, the sector suffered heavily during the COVID-19 pandemic and is still in recovery. Meanwhile, government initiatives to boost digitalization and high-tech industries are aimed at enhancing long-term economic resilience.
Malaysia’s economic outlook:Malaysia’s economy is expected to maintain steady growth, supported by a robust industrial base, strong trade links, and rising domestic consumption. However, challenges remain, including political instability, an aging population, and the need to move up the value chain in manufacturing to avoid stagnation. The government’s Madani Economy framework seeks to address these issues through economic transformation policies, but execution remains key to long-term success.
Malaysia's Macroeconomic Analysis:
Nominal GDP of USD 422 billion in 2024.
GDP per capita of USD 12,613 compared to the global average of USD 10,589.
Average real GDP growth of 4.2% over the last decade.
Sector Analysis
In 2021, services accounted for 53% of overall GDP, manufacturing 23%, other industrial activity 14%, and agriculture 10%. Looking at GDP by expenditure, private consumption accounted for 58% of GDP in 2021, government consumption 13%, fixed investment 22%, and net exports 7%.International trade
In 2021, manufactured products made up 70% of total merchandise exports, mineral fuels 12%, food 11%, ores and metals 5% and agricultural raw materials 1%, with other categories accounting for 1% of the total. In the same period, manufactured products made up 67% of total merchandise imports, mineral fuels 13%, food 9%, ores and metals 6% and agricultural raw materials 2%, with other goods accounting for 3% of the total. Total exports were worth USD 352 billion in 2022, while total imports were USD 294 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 4.2% in the decade to 2024. To read more about GDP growth in Malaysia, go to our dedicated page.
Fiscal policy
Malaysia's fiscal deficit averaged 4.3% of GDP in the decade to 2023. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 3.6% in the decade to 2024. For more information on Malaysia's unemployment click here.
Inflation
Inflation averaged 2.0% in the decade to 2024. Go to our Malaysia inflation page for extra insight.
Monetary Policy
Malaysia's monetary policy rate ended 2024 at 3.00%, down from 3.25% a decade earlier. See our Malaysia monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the ringgit weakened by 22.2% vs the U.S. dollar. For more info on the ringgit, click here.
Economic situation in Malaysia
An advance release showed that the economy ended the year on a weaker note: Annual GDP growth fell to 4.8% year on year in Q4 (Q3: +5.3% yoy), falling short of market expectations. Data from October–November showed that agricultural output contracted for the first time in a year and a half, and growth in the manufacturing and construction sectors softened: Heavy monsoon rains in November–December hindered momentum and could result in a downward revision of Q4’s figure. However, mining production fell less than in Q3 and services sector activity accelerated. In Q1, GDP growth is forecast above Q4’s level on lower inflation and export-frontloading ahead of higher U.S. tariffs. In other news, Malaysia and Singapore formalized the long-awaited Johor-Singapore Special Economic Zone agreement on 7 January, boding well for job creation in the short term and investment in the long term.Malaysia Economic Forecasts
Projections out to 2034.52 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 35 expert analysts.
Want to get insight on the economic outlook for Malaysia in the coming years? FocusEconomics collects projections out to 2034 on 52 economic indicators for Malaysia from a panel of 35 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Malaysia economy. To download a sample report on the Malaysia's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.