KUALA LUMPUR (Reuters) -Malaysia's economy grew 4.4% in the second quarter of 2025 from a year earlier, just below market expectations and a government estimate, data showed on Friday.
Economists surveyed by Reuters had forecast annual gross domestic product growth would come in at 4.5% in the April-to-June period, in line with the government's advance estimate released last month. In the first quarter, the economy also grew an annual 4.4%.
The central bank said second-quarter growth was driven by
robust household spending and positive labour market conditions, but said forecasting was challenging amid continued uncertainty from U.S. tariffs.
"Growth could move in different directions... we are operating in a different environment where changes happen very quickly," Bank Negara Malaysia Governor Abdul Rasheed Ghaffour told a press conference.
A 19% tariff on Malaysian exports to the United States took effect earlier this month, although some goods remain exempt pending a review of U.S. laws. Malaysia's exports declined in annual terms in May and June.
Export growth is expected to be moderate in the second half of 2025, though there would be support from demand for electrical and electronic goods and higher tourist arrivals, Abdul Rasheed said.
Last month, the central bank lowered its growth forecast for 2025 to a range of 4% to 4.8% from 4.5% to 5.5% due to global tariff uncertainties and shifting trade policies.
The bank also cut interest rates for the first time in five years in July to "pre-emptively preserve" the export-oriented economy's growth.
Inflation has moderated in recent months, with the consumer price index rising 1.1% from a year earlier in June, its slowest pace in more than four years.
(Reporting by Rozanna Latiff; Editing by John Mair)
