Malaysia’s Economy in 2025: GDP, FDI & Key Industries
Malaysia’s economy is one of Southeast Asia’s most diversified, built on a foundation of manufacturing, services, and natural resources.
The country has long been a leading exporter of palm oil, petroleum, and liquefied natural gas, while also developing strong electronics and automotive industries.
This combination of natural wealth and industrial capacity has positioned Malaysia as an upper middle-income economy with steady growth.
The services sector is the largest contributor to GDP, with finance, tourism, and logistics playing important roles.
Malaysia has also benefited from its strategic location along major shipping routes, serving as a hub for regional trade.
Despite its strengths, Malaysia faces structural challenges.
Income inequality, reliance on commodity exports, and fiscal pressures continue to shape policymaking.
External factors such as fluctuations in global demand, energy prices, and supply chain shifts influence growth prospects.
Looking forward, Malaysia aims to strengthen resilience by expanding domestic innovation, encouraging investment, and deepening regional integration through ASEAN and global trade agreements.
Key Malaysia economic data
These key data points provide a general overview of Malaysia’s economy.
Malaysia GDP in 2024 by sector
| Description | RMB millions | US$ milllions |
| Total | 1,932,291 | 457,347.31 |
| Agriculture | 157,066 | 37,175.33 |
| Mining and Quarrying | 153,740 | 36,388.14 |
| Manufacturing | 434,772 | 102,904.60 |
| Electricity, Gas and Water | 47,843 | 11,323.75 |
| Construction | 78,079 | 18,480.24 |
| Wholesale and Retail Trade, Accommodation and Restaurants | 405,829 | 96,054.30 |
| Transport, Storage and Communication | 186,181 | 44,066.46 |
| Finance, Insurance, Real Estate and Business Services | 200,486 | 47,452.22 |
| Other Services | 88,555 | 20,959.69 |
| Government Services | 156,983 | 37,155.67 |
| Less : FISIM 5 undistributed | 0 | 0.00 |
| Plus : Import duties | 22,760 | 5,386.90 |
Source: Department of Statistics Malaysia
Latest Malaysia GDP growth forecasts
July 2025: The IMF raised its forecast to 4.5 percent for 2025, up 0.4 percentage points from April, before slowing to 4.0 percent in 2026. It pointed to resilient household spending and investment as key drivers. Together, these estimates indicate steady but cautious growth, with domestic demand underpinning momentum but external risks likely to weigh on performance.
June 2025: The OECD issued its Economic Outlook projecting Malaysia’s GDP to grow 3.8 percent in 2025 and 4.1 percent in 2026, highlighting challenges from weaker trade and tariff disputes affecting key sectors like electronics and palm oil.
March 2025: Bank Negara Malaysia initially projected GDP growth of 4.5 percent to 5.5 percent for 2025, citing resilient domestic demand. By July 28, it revised this forecast to 4.0 percent to 4.8 percent, reflecting weaker global demand and heightened geopolitical uncertainty, while maintaining priorities on fiscal consolidation and inflation control.
Foreign direct investment in Malaysia
In recent years, Malaysia has become a popular investment destination.
Malaysia FDI by sector 2024
| MYR | US$ | |
| 1. Agriculture | 166 | 39.29 |
| 2. Mining and quarrying | 5,261 | 1,244.39 |
| 3. Manufacturing | 9,070 | 2,145.48 |
| Food, beverages and tobacco | 2,593 | 613.40 |
| Textiles, wearing apparel, leather and footwear | -316 | -74.78 |
| Wood products, furniture, paper products and printing | 444 | 105.12 |
| Petroleum, chemical, rubber and plastic | -6,146 | -1,453.82 |
| Non-metallic mineral products, basic metal and fabricated metal products | 3,175 | 750.92 |
| Electrical and electronic products | 8,700 | 2,057.90 |
| Transport equipment and other manufactures | 620 | 146.74 |
| 4. Construction | -2,352 | -556.24 |
| 5. Services | 39,380 | 9,315.29 |
| Utilities | -2,207 | -522.16 |
| Wholesale and retail trade, repair of motor vehicles and motorcycles | 3,831 | 906.16 |
| Transportation and storage | 1,185 | 280.30 |
| Information and communication | 26,195 | 6,196.35 |
| Financial and insurance/takaful activities | 8,407 | 1,988.64 |
| Human health and social work activities | 485 | 114.66 |
| Other services | 1,485 | 351.34 |
| Total | 51,526 | 12,188.20 |
Source: Department of Statistics Malaysia
Malaysia’s key industries
These are the key industries in Malaysia.
Mining and natural resources
Petroleum, liquefied natural gas, palm oil, and tin dominate Malaysia’s natural resource exports, providing significant revenue and foreign exchange earnings.
The sector remains vulnerable to global commodity price swings and environmental concerns.
Manufacturing
Electronics, semiconductors, automotive parts, and chemicals make manufacturing a central pillar of Malaysia’s global supply chain integration.
This industry benefits from foreign investment but faces rising competition from regional peers.
Food and beverage
The sector is expanding with strong demand for palm oil derivatives, processed foods, and halal-certified exports catering to regional and global markets.
Malaysia is positioning itself as a global leader in halal food production and certification.
Agriculture and fisheries
Palm oil, rubber, timber, and seafood remain key outputs, serving both domestic consumption and international trade.
Productivity growth is limited by land constraints and environmental sustainability pressures.
Infrastructure and construction
Large-scale public works, urban projects, and foreign investment in transport and industrial facilities drive this sector’s growth.
Government initiatives such as the Greater Kuala Lumpur plan are central to long-term development.
Energy
Malaysia’s energy industry spans oil, gas, and renewables, with policy shifts aimed at diversifying supply and boosting sustainability.
The country is gradually investing in solar and hydro projects to meet renewable energy targets.
Financial services
Kuala Lumpur is a leading hub for Islamic finance, banking, and insurance, with well-developed capital markets.
Continued regulatory reforms aim to strengthen resilience and attract global investors.
Digital economy
Government-backed initiatives are expanding e-commerce, fintech, and data services, positioning Malaysia to move into higher-value industries.
Trade
In 2024, Malaysia’s total merchandise trade reached approximately US$680.5 billion, highlighting the country’s continued role as a major trading nation in Southeast Asia, according to data from the Department of Statistics Malaysia.
Strong global demand for manufactured goods, alongside stable commodity exports, helped sustain growth despite external uncertainties.
Imports
Imports were valued at around US$324.1 billion, reflecting Malaysia’s reliance on intermediate goods, machinery, and technology to support its manufacturing and export sectors.
Consumer-related imports also grew, underscoring rising household demand and the country’s increasingly urbanised economy.
Exports
Exports stood at about US$356.4 billion, supported by electronics, palm oil, liquefied natural gas, and petroleum products.
Diversification into higher-value manufacturing, halal-certified foods, and renewable energy products also contributed to performance.
The resulting trade surplus of US$32.4 billion reinforced Malaysia’s strong external position.
Regional comparison
Malaysia’s economy is a little different to its neighbours’. Here’s how.
Vietnam
Vietnam’s manufacturing base is growing faster than Malaysia’s, especially in electronics and textiles. Malaysia, however, is more diversified with stronger financial services and energy exports.
Thailand
Thailand has a larger tourism sector and auto industry, while Malaysia holds an advantage in natural resource exports and Islamic finance.
Indonesia
Indonesia’s larger domestic market and natural resource wealth contrast with Malaysia’s stronger export orientation and higher per-capita income.
Philippines
The Philippines is heavily reliant on services and remittances, whereas Malaysia’s strength lies in manufacturing and commodity-driven trade.
Laos
Laos remains resource-dependent with limited industrialisation, while Malaysia has a broader and more globally integrated economy.
Cambodia
Cambodia’s garment-led growth is rapid but narrow, compared to Malaysia’s more mature and diversified economy.
FAQ: Economy of Malaysia
Commonly asked questions about the economy of Malaysia include:
What was Malaysia’s GDP growth in 2024?
Malaysia’s economy expanded by 5.1 % in 2024, up from 3.6 % in 2023, driven by strong domestic demand, record high investment approvals, and robust export performance despite a slowdown in the commodities sector
Which sectors primarily contributed to the Malaysia GDP in 2024?
GDP growth in Malaysia in 2024 was led by the services sector, with contributions also from agriculture and manufacturing, while mining and quarrying remained weaker.
What are some of Malaysia’s key industries as of 2024?
Key industries in Malaysia include manufacturing, energy, agriculture, financial services, and technology.
What was the value of Malaysia exports and imports in 2024?
In 2024, Malaysia’s total merchandise trade reached approximately US$680.5 billion, highlighting the country’s continued role as a major trading nation in Southeast Asia.
Outlook for the Economy of Malaysia
Malaysia’s outlook is for steady growth supported by domestic demand and investment.
The economy is expected to remain resilient, with services and industry providing the main drivers.
Policy is likely to stay supportive, keeping conditions stable for households and businesses.
This should help sustain spending and investment over the medium term.
External risks such as weaker global trade or commodity shifts remain, but Malaysia’s diverse economic base offers a buffer and supports a positive overall trajectory.
That said, Southeast Asian economies can be dynamic and change quickly.
With this in mind, the best way to keep up to date with the changing business environment is to make sure to subscribe to Vieter.
