The Asian Development Bank (ADB) has lowered Malaysia’s 2025 GDP growth forecast to 4.3 percent, a 0.6 percentage point downgrade from its April projection of 4.9 percent, according to the September 2025 Asian Development Outlook (ADO).
For 2026, growth is now expected at 4.2 percent, also reduced by 0.6 percentage points from the April forecast of 4.8 percent.
Inflation projections were revised lower.
Consumer prices are forecast to rise 1.8 percent in 2025, compared with 2.5 percent previously, before easing further to 2.2 percent in 2026, down from the earlier estimate of 2.5 percent.
Malaysia’s revised 2025 growth forecast of 4.3 percent puts it ahead of Thailand, which is expected to expand only 2.0 percent, but behind Indonesia at 4.9 percent, the Philippines at 5.6 percent, and Vietnam at 6.7 percent.
On inflation, Malaysia’s 1.8 percent projection is higher than Thailand’s .5 percent but broadly in line with Indonesia and the Philippines, and well below Vietnam’s 3.9 percent.
This positions Malaysia in the middle of the regional pack, with moderate growth prospects and contained price pressures compared to its peers.
See also: Malaysia’s Economy in 2025: GDP, FDI & Key Industries
GDP growth forecasts (% per year)
| 2025 | 2026 | |||||
| Apr | Sep | Change | Apr | Sep | Change | |
| Southeast Asia | 4.7 | 4.3 | -0.4 | 4.7 | 4.3 | -0.5 |
| Vietnam | 6.6 | 6.7 | 0.1 | 6.5 | 6.0 | -0.5 |
| Indonesia | 5.0 | 4.9 | -0.1 | 5.1 | 5.0 | -0.1 |
| Philippines | 6.0 | 5.6 | -0.4 | 6.1 | 5.7 | -0.4 |
| Thailand | 2.8 | 2.0 | -0.8 | 2.9 | 1.6 | -1.3 |
| Malaysia | 4.9 | 4.3 | -0.6 | 4.8 | 4.2 | -0.6 |
Inflation forecasts (% per year)
| 2025 | 2026 | |||||
| Apr | Sep | Change | Apr | Sep | Change | |
| Southeast Asia | 3 | 2.5 | -0.5 | 2.8 | 2.7 | -0.1 |
| Vietnam | 4 | 3.9 | -0.1 | 4.2 | 3.8 | -0.4 |
| Indonesia | 2 | 1.7 | -0.3 | 2 | 2 | 0.0 |
| Philippines | 3 | 1.8 | -1.2 | 3 | 3 | 0.0 |
| Thailand | 1 | 0.5 | -0.5 | 1.1 | 0.8 | -0.3 |
| Malaysia | 2.5 | 1.8 | -0.7 | 2.5 | 2.2 | -0.3 |