KUALA LUMPUR, Oct. 9 (Xinhua) -- Malaysia's economy is poised to maintain a steady growth trajectory in the second half of the year, bolstered by resilient consumer spending, and a strong labor market, steady investment activity, and supportive domestic policies.

TA Securities said in its recent report that Malaysia's gross domestic product (GDP) growth is projected at around 4.1 percent year-on-year in the third quarter, slightly slower than 4.4 percent in the second quarter, before picking up to 4.7 percent in the fourth quarter.

"The improvement in the final quarter is likely to be underpinned by cheaper fuel costs, ongoing cash assistance, a more accommodative interest rate environment, low and stable inflation, and resilient employment, which should sustain private consumption," it said.

While tariff headwinds and weaker global demand are set to weigh on exports, firm domestic demand is expected to offset external drags, keeping full-year GDP growth close to 4.4 percent.

RHB Investment Bank, in its recent report, also foresees Malaysia's economy sustaining growth at 4 percent in the second half, underpinned by robust consumer spending, a healthy labour market, steady investment activity, and supportive domestic policies.

According to the report released on Tuesday, the expansion in investment will be supported by the progress of multi-year projects in both the private and public sectors, the continued realization of approved investments, as well as the ongoing implementation of catalytic initiatives under national master plans, including the National Energy Transition Roadmap and the New Industrial Master Plan 2030.

While investment spending was robust in the first half of 2025, recording double-digit growth of 10.5 percent, the bank opined that this momentum is expected to extend into the second half, amid sustained strength in structural investment, as well as machinery and equipment spending.

Meanwhile, MBSB Research said in its recent note that Malaysia's economy is projected to experience a more moderate growth in the second half as the impact of U.S. tariffs takes hold, weighing on external trade.

For the full year, it foresees Malaysia's GDP growing at 4.3 percent, easing from the robust 5.1 percent recorded last year.

The moderation in GDP growth is mainly attributable to softer external demand following the U.S. tariff implementation.

Nevertheless, MBSB opined that Malaysia still gained from the increased electrical and electronics demand in line with the global tech upcycle.

Sustained domestic consumption and investment activity are expected to keep Malaysia's economic growth in positive territory, cushioning the impact of the external slowdown, it added. ■