The Malaysia Trade & Export Slowdown in Q2 2025 shows a clear contrast between external weakness and domestic strength. While global demand for Malaysian goods has cooled, the country’s internal sectors continue to perform well. Let's take a closer look!
Malaysia Trade & Export Slowdown, Growth Loses Steam
Malaysia’s total merchandise trade expanded by only 3.4% year-on-year in Q2 2025. Exports grew at the same 3.4% rate, which is a clear sign of slowing momentum compared to earlier quarters.
Imports, however, told a different story. They surged 9.0%, widening the gap between domestic demand and external trade performance. This mismatch led to the trade surplus narrowing by 55.3% from the previous year, falling to RM14.4 billion.
Such figures highlight a growing imbalance: local demand remains robust, but global demand for Malaysian goods is weakening.
May 2025 Data Reflects the Strain
In May 2025, Malaysia’s total trade inched up just 2.6% year-on-year, reaching RM252.5 billion. While growth stayed positive, it was subdued. More telling was that exports declined 1.1% compared to April 2024, showing a drop in external appetite for Malaysian products.
The export growth rate in May dipped to 2.6%, down from stronger levels earlier in the year. Yet, this slowdown did not carry over to local sectors. Instead, internal activity, particularly re-exports, grew sharply.
Domestic Strength Keeps the Economy Balanced
Despite the cooling export sector, domestic demand continues to support Malaysia’s economy. Re-exports climbed 16.1% in May 2025 to RM25.8 billion, signaling healthy domestic movement of goods and resilient internal trade networks.
This strength shows how domestic industries are cushioning Malaysia from the global downturn. The data suggests that local consumption and internal trade are becoming stronger pillars of economic growth.
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Even as global uncertainty dampens exports, businesses and consumers inside Malaysia continue to buy, sell, and produce actively.
July Brings a Brief Rebound in Malaysia Trade & Export Slowdown
In July 2025, exports jumped 6.8%, offering a brief recovery after the slower Q2 results. But even this rebound couldn’t offset the broader trend. Import growth still outpaced export growth, showing that while internal demand remains lively, external demand remains the weak link.
Malaysia’s export growth of just 3.4% in Q2 — against a backdrop of 9.0% import growth — underscores how dependent the country still is on global conditions. The RM14.4 billion trade surplus, although positive, is now less than half of what it was a year ago.
A Resilient Yet Cautious Outlook for Malaysia Trade & Export Slowdown
Malaysia’s domestic economy continues to hold steady despite the Malaysia Trade & Export Slowdown. The resilience in local demand offers hope that internal sectors can help buffer the global slowdown’s effects.
Still, sustained external weakness could limit future growth if export markets don’t recover soon. Policymakers and businesses alike will need to adapt. Investing in value-added industries and diversifying export destinations to maintain momentum.
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For companies navigating these trade shifts, expert guidance matters. To understand how to adapt business strategies amid the Malaysia Trade & Export Slowdown, contact Market Research Malaysia, a global consulting firm that helps organizations strengthen operations and seize growth opportunities in changing markets.
FAQs
1. What caused Malaysia’s export slowdown in Q2 2025?
Global demand weakened, reducing export growth to 3.4%, while imports rose 9.0%, narrowing the trade surplus.
2. How strong is Malaysia’s domestic demand?
Domestic demand remains robust, reflected by a 16.1% rise in re-exports in May 2025 and strong import growth.
3. Why did Malaysia’s trade surplus drop sharply?
The trade surplus fell 55.3% to RM14.4 billion because import growth outpaced export gains.
4. Did exports improve after Q2?
Yes. Exports rebounded 6.8% in July 2025, but overall growth still lagged behind imports.
5. How can Market Research Malaysia help businesses in Malaysia?
Market Research Malaysia provides expert advice on adapting to the Malaysia Trade & Export Slowdown, improving efficiency, and expanding into new markets.
