Malaysia economic growth likely slowed to 5.3% in January-March

By Renusri K

BENGALURU, May 12 - Malaysia's ‌economic growth likely ​eased ​in the first quarter, after expanding the most in more than three years in the previous quarter, according to a Reuters poll ‌of economists, largely due to a normalisation in growth.

Strong household consumption ⁠that has benefited from fuel subsidies, and exports continued to support the economy.

The Southeast Asian economy ‌was expected to grow 5.3% year-on-year ‌in the January-March quarter, slowing from 6.3% growth in the final quarter of 2025, according to a Reuters poll of 17 economists conducted between May ​6 and 12 and in line with a preliminary estimate released in April.

Forecasts in the poll ranged from 5.1% to 5.5%. Official gross domestic product data ⁠is due on Friday.

"As long as fuel subsidies are in place, household cash flow is protected, and that ​means GDP growth is also protected from the household side. To add to that, the tailwinds from the global semiconductor upcycle ​are also supporting Malaysia's economic growth," said Lavanya ‌Venkateswaran, senior ASEAN economist at OCBC Bank.

"Economic growth will slow in the coming quarters, the full-year average is still 4.4%, but ⁠the economy will remain resilient nonetheless, at least being better able to mitigate risks than some regional peers."

Advance estimates showed the economy continued to be supported by expansions in ⁠the services, manufacturing, construction and agriculture sectors, even as uncertainty from the U.S.-Israel war on Iran ​pushed up inflation in several Asian economies and weighed on domestic demand.

However, the mining and quarrying sector contracted 1.1% in the quarter due to lower production, particularly of crude oil and ‌natural gas.

Malaysia's economy was expected to grow 4.5% this year, in line with Bank Negara Malaysia's forecast range of 4%-5%, ‌according to a separate Reuters poll conducted in April.

Bank Negara Malaysia kept its benchmark ⁠interest rate unchanged at 2.75% for ‌a fifth consecutive meeting, ​citing expectations of continued price stability and sustainable economic growth.

(Reporting by Renusri K; Polling by Pranoy Krishna; Editing by Vivek Mishra and ‌Harikrishnan Nair)

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