Gross domestic product (GDP) rose 4.5% in the April-June period from a year earlier, according to advance estimates from the statistics department.
That’s higher than the 4.2% median estimate in a Bloomberg survey, and faster than the 4.4% expansion in the first three months of the year.
The latest economic print may give breathing space to policymakers as they review their 4.5%-5.5% growth projection for 2025.
Malaysia has been threatened with a 25% US import levy and officials are racing to negotiate the tariff lower before they take effect on Aug 1.
Exports unexpectedly declined 3.5% in June from a year earlier, the statistics agency said in a separate statement.
Analysts’ median estimate was for an increase of 5.4%, according to a Bloomberg survey. Imports rose 1.2%, while total trade fell by 1.2%.
The data suggests that the effect of frontloading of shipments to the US are wearing off, according to Lavanya Venkateswaran, analyst at Oversea-Chinese Banking Corp.
“Overall, we see the incoming data as mixed, suggesting weakening external demand amidst better domestic demand conditions,” she said.
She maintained an annual GDP forecast of 3.9% growth, and expects another 25-basis-point cut in interest rates by the central bank this year.
The central bank last week cut interest rates by a quarter point to preemptively support the economy, warning that “the balance of risks to the growth outlook remains tilted to the downside”.
Manufacturing growth slowed to 3.8% in the second quarter, from 4.1% in the first three months of the year, according to the statistics department.
Growth in the services sector accelerated to 5.3%, from 5% in the previous three months, with key contributions from wholesale and retail trade, along with transportation and storage businesses.
“Malaysia’s economy is estimated to have expanded by 4.4% in the first half of 2025,” the government agency said.
The construction sector moderated, but still saw an 11% expansion, the sixth straight double-digit quarterly increase.
The advance GDP estimates are based on available information from April and May, along with estimates.
Preliminary GDP data, which will provide a detailed analysis of the second quarter, will be released on Aug 15.