Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank) has projected Malaysia’s growth to hover between 4.5% to 5%, reflecting the positive sentiment of the overall economy, in line with the robust Madani Economy framework.
Its Acting Group President/Chief Executive Officer Datuk Dr Mohammad Hardee Ibrahim said Malaysia’s GDP growth accelerated to 5.1% year-on-year for the full year 2024, which is well within their in-house estimate of 4.3% to 5.3%.
“The growth was driven by stronger household spending and supported by favourable labour market conditions, robust investment and recovery in external trade.
“Riding on the back of this positive momentum, we forecast Malaysia’s GDP for 2025 to register between 4.5% and 5%,” Mohammad Hardee said in a statement.
Mohammad Hardee added that the construction sector is expected to lead in 2025 with the highest growth rate, continuing its strong momentum since 2023, with double-digit growth in 2024.
“At the same time, the manufacturing sector is also set to expand, supported by the implementation of major policies such as the New Industrial Master Plan 2030, National Energy Transition Roadmap and the National Semiconductor Strategy,” he shared.
Meanwhile, the bank’s chief economist Lynette Lee Li Qing said they are anticipating the GDP growth performance in 2025 to be driven by expansion in the services sector, which will remain the primary engine of growth, with increased support from both consumer and business-related subsectors.
“Going forward, we remain cautiously optimistic about Malaysia’s overall growth performance in 2025 amid rising headwinds, mainly stemming from the external side such as slower GDP growth in key trading partners, potential escalation of the US-China trade war and rising global protectionist policies, volatile geopolitical conflicts as well as lower than expected commodity production and prices,” Lee added.
SME Bank’s growth forecast for 2025 is in line with the latest projection by the World Bank’s economic outlook in January 2025, which targets global growth to stabilise at 2.7% in 2025 and 2026. This stabilisation is supported by easing inflation, lower commodity prices and monetary easing across advanced as well as emerging economies.
