Malaysia's Gross Domestic Product (GDP) growth of 6.3% year-on-year (YoY) in the fourth quarter of 2025 is considered difficult to maintain for the next period.
According to CGS International (CGSI), the country's economic fundamentals remain resilient entering 2026 with GDP growth forecast this year at 4.8% from 4.6% previously.
The firm also informed that the unexpected growth in the fourth quarter of 2025 (Q4 2025) was partly supported by increased palm oil production, as well as a surge in government spending.
Although the allocation reached its highest level since the second quarter of 2021, it is expected to moderate again after the end of the first quarter of 2026.
On 13 February 2026, the Department of Statistics Malaysia (DOSM) announced that GDP grew by 6.3% in 4Q25, surpassing the estimate of 5.7% and that 2025 growth would reach 5.2% compared to 5.1% in 2024.
Meanwhile, the country's economic growth momentum is seen to have stabilized again with a moderate rate of 0.8% from 2.7% recorded in the third quarter of 2025.
CGSI also explained that the current account surplus was found to have shrunk to RM2 billion in 4Q25 compared to RM12.8 billion (equivalent to 0.4% of GDP) in the previous quarter.
This decline was due to a lower surplus in the goods account, but it was partially offset by an increase in the services account surplus due to stronger tourism receipts.
At the same time, CGSI expects the Visit Malaysia Year 2026 (VMY 2026) initiative to continue to support the current account and maintain the 2026 current account surplus projection at 1.7% of GDP.
While the 4Q25 surge is considered exceptional, Malaysia's economic momentum is expected to remain stable in 2026.
This positive performance will continue to be driven by a strong labour market, public sector wage adjustments, and subdued inflation.
