Industrial output rose 4.2% year-on-year in July, according to the statistics department, the fastest pace this year.

The data exceeded all projections in a Bloomberg survey of economists that had a 2.8% median estimate.

A 4.4% growth in the manufacturing sector and a 4.3% rebound in mining fuelled the increase in output, chief statistician Uzir Mahidin said in a statement today.

Higher production in export-oriented industries boosted manufacturing.

Malaysia’s central bank held borrowing costs last week amid low inflation and resilient consumption, after having cut the overnight policy rate by 25 basis points in July – its first such move in five years.

Bank Negara Malaysia governor Abdul Rasheed Ghaffour said that the easing would boost economic growth for the rest of 2025 and into 2026.

“Still, the nation’s industrial production for the first seven months of 2025 grew at a slower pace of 2.4%, compared with 4% in the same period last year,” Uzir said.

Malaysia predicts economic growth of 4% to 4.8% this year, down from 5.1% in 2024, as it grapples with US president Donald Trump’s tariffs.