Malaysia’s Growth Outlook Eases as Leading Index Slips in June 2025

KUALA LUMPUR, Sept 1 — Malaysia’s leading index (LI) dipped -0.2% year-on-year in June 2025, reversing a +0.3% gain in May, signalling more modest economic growth ahead. The decline was driven by a sharp -27.4% drop in imports of basic precious and non-ferrous metals.

Despite this, Malaysia’s GDP expanded +4.4% in 2QCY25, steady from the previous quarter though slightly below the advance estimate of +4.5%. Meanwhile, trade improved in July (+3.8%yoy) after months of contraction, buoyed by a +6.8% rebound in exports.

Growth Outlook

Industrial production surprised on the upside, rising +3.0% in June against consensus (+1.0%), while distributive trade gained momentum (+4.8%yoy), underpinned by retail and wholesale growth.

Economists expect growth to moderate to +4.3% in 2025 (2024: +5.1%), though projections were revised slightly higher from +4.0% on stronger domestic demand resilience.

Key takeaways:

• LI fell -0.2% in Jun-25, signalling softer momentum.
• GDP +4.4% in 2QCY25, steady but below estimates.
• Trade rebounded in Jul-25, exports +6.8%.
• IPI +3.0% in Jun-25, above expectations.
• GDP growth forecast revised to +4.3% for 2025.

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