By Danial Dzulkifly
SHAH ALAM, Nov 26 — Selangor’s contribution to Malaysia’s gross domestic product is expected to rise to 26.4 per cent in 2025, up from 25.9 per cent last year and the projected 26.1 per cent this year, according to a prominent economist.
Bank Muamalat chief economist Mohd Afzanizam Abdul Rashid said this will be driven by initiatives under the RM3 billion 2025 Selangor Budget and projected growth across key economic sectors.
However, this is slightly shy of the state’s target of achieving a 27 per cent contribution to the national economy by the end of the First Selangor Plan (RS-1) next year. The state government had originally targeted a 30 per cent contribution, before reviewing it downward during the plan’s mid-term review in July.
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Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid in a recent interview with Bernama. — Picture by BERNAMA[/caption]
In his post-state budget analysis, Afzanizam forecast that Selangor's economy will grow by 6.0 per cent in 2025, compared to an estimated 5.9 per cent this year.
This growth is supported by an expansionary fiscal strategy and strong performance in the manufacturing, construction, and services sectors.
“Selangor’s economy is poised for stronger growth, fuelled by an expansionary budget and robust sectoral performance,” he said in the analysis shared with Media Selangor.
The manufacturing sector is anticipated to expand by 5.9 per cent next year, following a projected 6.6 per cent growth in 2024.
The construction and services sectors, meanwhile, are expected to grow by 9.1 per cent and 5.8 per cent, respectively, compared to this year’s estimated 9.7 per cent and 5.0 per cent.
Afzanizam also pointed to Selangor’s sound fiscal management, noting that the state has recently settled its debt obligations to the Federal government, including RM19.2 million for water supply projects and RM1.9 million under the Skim Amanah Saham Selangor.
“This achievement positions Selangor as one of the few states with minimal debt obligations, paving the way for greater fiscal space.
“With strengthened financial standing, the state is better equipped to channel resources into strategic initiatives and sustainable economic development, reinforcing its status as a leading economic powerhouse in Malaysia,” he said.
Menteri Besar Dato’ Seri Amirudin Shari tabled the 2025 Selangor Budget, themed 'Dynamic Selangor: Perfect Aspirations of Malaysia Madani', on November 15, allocating a total of RM3 billion.
Of that, RM1.7 billion (56.7 per cent) is allocated for operating expenditure, covering civil servant salaries, security services, and maintenance across 26 departments.
The remaining RM1.3 billion (43.3 per cent) will fund development projects focusing on infrastructure, social development, and economic expansion initiatives.
