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 2022, services accounted for 53% of overall GDP, manufacturing 23%, other industrial activity 16%, and agriculture 8%. Looking at GDP by expenditure, private consumption accounted for 60% of GDP in 2023, government consumption 12%, fixed investment 23%, and net exports 5%.International trade
In 2021, manufactured products made up 68% of total merchandise exports, mineral fuels 17%, food 10%, ores and metals 4% and agricultural raw materials 1%, with other categories accounting for 0% of the total. In the same period, manufactured products made up 64% of total merchandise imports, mineral fuels 19%, food 8%, ores and metals 5% and agricultural raw materials 1%, with other goods accounting for 3% of the total. Total exports were worth USD 329 billion in 2024, while total imports were USD 300 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
Our panelists expect annual GDP growth to be hovering near Q4’s level in Q1 2025. Available data suggests that private spending continues to support overall growth: Retail sales grew at a quicker pace in January compared to Q4 amid low inflation and unemployment. That said, industrial output lost steam in the same month compared to the prior quarter as manufacturing production grew at a softer pace and mining activity contracted more sharply. Additionally, goods exports grew at a milder pace in January–February. In other news, Malaysia recently signed a 10-year agreement with a UK-based chip company to obtain blueprints for advanced semiconductors, which should boost its role in high-value manufacturing. That said, challenges like brain drain, limited public funding and weak commercialization may hinder Malaysia’s ability to develop a competitive chip design industry.Malaysia Economic Forecasts
Projections out to 2034.52 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 33 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 33 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.