Kuala Lumpur — Malaysia is projected to become the second fastest‑growing economy in Southeast Asia after Vietnam, according to multiple investment research firms. Stronger‑than‑expected performance in the first nine months of 2025 has laid a solid foundation for continued expansion.
HSBC Global Investment Research revised Malaysia’s GDP growth forecast for 2025 to 5%, up from 4.2%, citing resilient domestic demand and flexible diplomatic strategies. Maybank Investment Bank and Standard Chartered also raised their estimates, reflecting confidence in Malaysia’s economic trajectory.
Domestic consumption remains the anchor of Malaysia’s growth narrative, even as external demand fluctuates. Analysts note that proactive diplomacy at the 47th ASEAN Summit helped reduce external uncertainty, allowing Malaysia to balance neutrality with engagement of key trading partners.
Maybank IB adjusted its 2026 forecast to 4.5%, while Standard Chartered trimmed its outlook from 5% to 4.5%, citing potential slowdown in external demand. CIMB Securities echoed similar caution, projecting 4.1% growth in 2026. These revisions highlight the delicate balance between domestic resilience and global headwinds.
Malaysia’s central bank is expected to maintain its benchmark interest rate at 2.75%, supporting consumption and investment activity. This monetary stability is seen as crucial for sustaining momentum amid global volatility.
Ultimately, Malaysia’s rise as ASEAN’s second fastest‑growing economy underscores both opportunity and challenge. While domestic strength provides confidence, external risks remain. The country’s ability to navigate shifting global dynamics will determine whether it can sustain its position alongside Vietnam as a regional growth leader.
