Annual Report 2025 Economic and Monetary Review and Financial Stability Review

BNM Publishes Annual Report 2025, Economic and Monetary Review 2025, and Financial Stability Review for Second Half 2025

Embargo : For immediate release
31 Mar 2026

Bank Negara Malaysia (BNM) today released its Annual Report 2025 (AR 2025), Economic and Monetary Review 2025 (EMR 2025), and Financial Stability Review for Second Half 2025 (FSR 2H 2025).

AR 2025 highlights BNM’s key initiatives in the past year in discharging its mandates to promote monetary and financial stability conducive to the sustainable growth of the Malaysian economy. The report also provides an account of the broader central bank operations. Meanwhile, EMR 2025 provides BNM’s economic assessments and forecasts, covering economic and monetary developments in 2025 and the outlook for 2026. The FSR is a biannual publication which details BNM’s assessment of domestic financial stability risks and outlook.

Highlights of the reports:

• In 2025, the Malaysian economy grew by 5.2%, anchored by resilient domestic demand.
  • Household spending remained firm, supported by positive labour market conditions and more targeted policy measures.
  • Investment activity increased strongly, driven by continued progress in multi‑year projects and strong investment approvals, particularly in high-technology services and advanced manufacturing.
  • Inflation averaged 1.4%, the lowest in five years. That said, cost of living remains a concern. The AR 2025 feature article ‘ Beyond the Headline: Inflation Through the Eyes of Households ’ explains how people’s day-to-day experience of prices can be different from official inflation data, which remains useful as an indicator for guiding policy decisions.
• Amid the challenging and uncertain global landscape, the Malaysian economy is projected to grow between 4% to 5% in 2026. Malaysia is entering this challenging period from a position of strength, supported by robust domestic demand, moderate inflation, a sound financial sector, and a resilient external position. BNM will remain vigilant to the rapidly evolving Middle East conflict.
  • With its diversified growth drivers, resilient domestic demand, and a secure foothold in the technology cycle, Malaysia is well positioned to navigate the challenges and risks ahead.
  • Household consumption remains an important anchor of growth. Positive income prospects, a stable labour market and targeted policy support will sustain resilient household spending. The EMR 2025 feature article ‘ Sustaining the Engine: The Evolving Drivers behind Malaysia’s Private Consumption Growth ’ dissects this issue.
  • Investment activity will continue to expand, albeit at a more moderate pace.
  • The external sector is expected to remain resilient against headwinds from the Middle East conflict and uncertainties surrounding tariffs. The E&E sector is expected to benefit from strong semiconductor demand supporting AI developments and the ongoing realisation of data centre investments. The EMR 2025 feature article ‘ Disentangling Malaysia Value Chains in The Age of Trade Turbulence ’ explores this topic. Inbound tourism, in conjunction with Visit Malaysia Year 2026, would also support the external sector.
  • Headline inflation is expected to average between 1.5% to 2.5%, well anchored and close to its long-term average.
  • Domestic monetary and financial conditions will remain supportive of financial needs amid continued economic expansion.
  • Monetary policy will continue to focus on maintaining price stability while fostering conditions that support sustainable growth.
• The financial system is resilient to support the economy through the uncertain global environment. Efforts also continue to further strengthen and develop the financial sector.
  • Financial stability continues to be preserved. Financial institutions are well capitalised and operationally resilient, supported by ample liquidity buffers and sound asset quality. Malaysia’s payment and settlement systems remain reliable and secure.
  • Macro solvency stress tests, which incorporate major downside risks, affirm the resilience of financial institutions against severe macroeconomic and financial shocks.
  • The financial sector continues to support the financing needs of the economy. Outstanding financing to small and medium enterprises (SMEs) grew 5.9% in 2025. Financing approvals and disbursements remained stable and broad-based across sectors, indicating continued access to financing.
  • Reforms were advanced to strengthen consumer protection and resilience in the financial sector, such as the enactment of the Consumer Credit Act, revisions to the Hire-Purchase Act, the launch of the National Financial Literacy Strategy 2026-2030, and the introduction of RESET initiatives in coordination with the Ministry of Health and the Ministry of Finance.
  • Platforms and initiatives such as the Digital Asset Innovation Hub, Climate Finance Innovation Lab and i-CITA programme were set up to support financial solutions that respond directly to the needs of our economy and society. Further progress has also been made to build climate resilience of financial institutions and their customers.
  • Banks are stepping up efforts to close service gaps for the unserved and underserved. Read more about this in the AR 2025 feature article ‘ Bridging the Gap: The Path to Affordable and Accessible Basic Banking Services ’.
  • In the area of Islamic finance, the industry continues to advance value-based finance that delivers positive impact and socio-economic outcomes. The AR 2025 feature article ‘ The Rise of Islamic Finance in ASEAN: Unlocking its Growth Potential ’ highlights the growing opportunities and the potential for Islamic finance to drive inclusive and sustainable economic outcomes within the region.
  • As the Financial Sector Blueprint 2022–2026 enters its final phase, work is underway to chart out the next chapter of Malaysia’s financial sector.
  • Efforts to combat financial fraud continue to be intensified. Efforts to reinforce defences are yielding results, with some banks reporting zero malware cases in 2025. A whole-of-nation approach remains key to protecting vulnerable communities from evolving scams. Read more about these efforts in the AR 2025 feature article ‘ Fraud Resolution: Building Trust through Shared Accountability ’.
• ASEAN’s unified commitment and collective resolve anchored confidence, supported economic activity, and provided a more stable regional environment. The AR 2025 feature article ‘ Malaysia’s 2025 ASEAN/ASEAN+3 Chairmanship: Advancing Inclusive and Sustainable Economic Growth for ASEAN and Malaysia ’ highlights how deeper integration and shared opportunities can benefit all ASEAN member states.
• Malaysia was placed under the highest category ‘Regular Monitoring’ by the Financial Action Task Force (FATF). It is an important affirmation of the country’s robust and improving anti-money laundering and counter terrorism financing (AML/CFT) regime.
• The AR 2025 also includes BNM’s Audited Financial Statements for the financial year ended 31 December 2025. As audited and certified by the Auditor General, BNM’s total assets stood at RM602.22 billion. A net profit after tax of RM12.45 billion was recorded, of which RM7.45 billion has been transferred to the BNM Risk Reserves. BNM declared a dividend of RM5 billion to the Government for the 2025 financial year. Bank Negara Malaysia Governor Dato’ Sri Abdul Rasheed Ghaffour said, ‘The Malaysian economy is resilient, recording growth of 5.2% in 2025 despite extremely challenging external environment. Stable domestic economic, monetary and financial conditions have helped cushion the impact of external shocks and paved the way for important reforms to take place. We must continue to strengthen our economic fundamentals and policy buffers to better position Malaysia to navigate prevailing and future headwinds. While the environment continues to evolve, BNM’s commitment is firmly anchored to faithfully discharge our mandate to build a brighter future for all Malaysians.’

To read the full publications, please visit bnm.gov.my/AR2025.

See also:

• Governor's Foreword
• Video of Press Conference
• Press Conference Slides
• Transcript of Governor's Remarks

Bank Negara Malaysia
31 March 2026

© Bank Negara Malaysia, 2026. All rights reserved.