Johor emerged as Malaysia’s fastest-growing state economy in 2025, recording 8% growth, while Pulau Pinang, Selangor and Perak also outpaced the national economic expansion of 5.2%, according to the Department of Statistics Malaysia (DOSM).
Malaysia’s economy expanded to RM1.74 trillion in 2025 from RM1.65 trillion a year earlier, supported by broad-based growth across all major sectors. Construction remained the fastest-growing sector with a 12.2% increase, while services, manufacturing, agriculture and mining also recorded positive growth.
Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said all states posted positive economic growth, with Johor leading at 8%, followed by Pulau Pinang at 7.3%, Selangor at 6.3% and Perak at 5.7%. Selangor, Kuala Lumpur, Johor, Sarawak and Pulau Pinang together contributed 67.9% of Malaysia’s economy.
Johor’s economy reached RM171 billion, accounting for nearly 10% of national GDP. DOSM attributed the state’s strong performance largely to the rapid expansion of the data centre industry, which boosted services, manufacturing and construction. Construction alone surged 26.7%, driven by non-residential developments, particularly data centre facilities.
Selangor remained the country’s largest state economy with GDP of RM460.1 billion, representing 26.5% of Malaysia’s total output, while Pulau Pinang strengthened its position as Malaysia’s electrical and electronics hub after manufacturing grew 10%.
DOSM said Malaysia’s economic outlook for 2026 remains positive, supported by continued investment, digital technology and data centre-related demand, despite ongoing global uncertainties including geopolitical tensions and changing trade policies.
