World Bank praises Malaysia’s resilient 4% economic growth across all three quarters in 2025, though warns of 2026 challenges from global headwinds.
KUALA LUMPUR: Malaysia has demonstrated positive and resilient economic growth this year, according to the World Bank.
The international financial institution noted Malaysia’s stronger-than-expected performance in the third quarter of 2025 reflects this economic resilience.
World Bank lead economist for Malaysia Apurva Sanghi described Malaysia’s approximately 4% growth across all three quarters as “hugely positive.”
“The world is not in a good place (with) slowing growth, stalling investment, and soaring debt. So from that perspective, Malaysia is doing quite well,” he told reporters at the National Economic Outlook Conference.
He cautioned that global headwinds would make 2026 more challenging for Malaysia’s economy.
These challenges include slowing world growth, weaker investment trends, and softer foreign direct investment flows into developing countries.
“The real test will be next year,” Sanghi added, noting the World Bank will issue its next economic upgrade in April.
In October, the World Bank raised its 2025 growth projection for Malaysia to 4.1% from its earlier forecast of 3.9%.
While acknowledging rising foreign direct investment inflows driven by data centre investments, Sanghi advised policymakers to assess their long-term job creation and sustainability contributions.
He also praised the government’s ongoing subsidy rationalisation programme as a well-implemented strategy.
The economist cited reforms in water tariffs, large-scale industrial electricity use, diesel, chicken, and egg subsidies as positive signs.
