IMF Staff Country Reports

The 2025 Article IV Consultation highlights that Malaysia’s economic performance has improved significantly in 2024. Disinflation is taking hold and external pressures have eased. The favorable economic conditions provide a window of opportunity to build macroeconomic policy buffers and accelerate structural reforms, especially as risks to growth are tilted to the downside amid an uncertain global outlook. Risks to the inflation outlook are tilted to the upside, including from global commodity price shocks and potential wage pressures. Malaysia’s financial sector remains sound. Banks’ capital and liquidity positions are robust. Credit growth, corporate and household balance sheets, and real-estate markets do not pose systemic risks at this juncture. Timely implementation of the authorities’ ambitious structural reform agenda remains essential for enhancing productivity and inclusive growth. Given the need to cushion the negative impacts of fiscal reforms on the poor and vulnerable, staff welcomes the progress made to develop the Pangkalan Data Utama digital registry, which can help strengthen social safety nets and public service delivery.