BENGALURU, May 12 – Malaysia’s economic growth likely eased in the first quarter, after expanding the most in more than three years in the previous quarter, according to a Reuters poll of economists, largely due to a normalisation in growth.
Strong household consumption that has benefited from fuel subsidies, and exports continued to support the economy.
The Southeast Asian economy was expected to grow 5.3 per cent year-on-year in the January-March quarter, slowing from 6.3 per cent growth in the final quarter of 2025, according to a Reuters poll of 17 economists conducted between May 6 and 12 and in line with a preliminary estimate released in April.
Forecasts in the poll ranged from 5.1 per cent to 5.5 per cent. Official gross domestic product data is due on Friday.
“As long as fuel subsidies are in place, household cash flow is protected, and that means GDP growth is also protected from the household side. To add to that, the tailwinds from the global semiconductor upcycle are also supporting Malaysia’s economic growth,” said Lavanya Venkateswaran, senior ASEAN economist at OCBC Bank.
“Economic growth will slow in the coming quarters, the full-year average is still 4.4 per cent, but the economy will remain resilient nonetheless, at least being better able to mitigate risks than some regional peers.”
Advance estimates showed the economy continued to be supported by expansions in the services, manufacturing, construction and agriculture sectors, even as uncertainty from the U.S.-Israel war on Iran pushed up inflation in several Asian economies and weighed on domestic demand.
However, the mining and quarrying sector contracted 1.1 per cent in the quarter due to lower production, particularly of crude oil and natural gas.
Malaysia’s economy was expected to grow 4.5 per cent this year, in line with Bank Negara Malaysia’s forecast range of 4 per cent-5 per cent, according to a separate Reuters poll conducted in April.
Bank Negara Malaysia kept its benchmark interest rate unchanged at 2.75 per cent for a fifth consecutive meeting, citing expectations of continued price stability and sustainable economic growth.
