Malaysia Jumps 11 Spots to 23rd in World Competitiveness Ranking 2025

Malaysia Climbs to 23rd in World Competitiveness Ranking 2025 — Highest Since 2020

Malaysia has surged 11 spots in the 2025 World Competitiveness Ranking (WCR) to secure the 23rd position out of 69 global economies, marking its best performance since 2020 and reaffirming its trajectory toward becoming one of the world’s most competitive nations.

The annual ranking, published by the Institute for Management Development (IMD) in Switzerland, evaluates countries based on their ability to sustain a business-friendly environment that fosters long-term economic prosperity.

The Ministry of Investment, Trade and Industry (MITI) described this leap from 34th in 2024 to 23rd in 2025 as a strong signal of Malaysia’s accelerating economic reforms, improved efficiency across public institutions, and resilience in international trade.

🚀 Top 10 Highlights of Malaysia’s Competitiveness Rise

📈 Economic Momentum Driving Malaysia’s Rise

Malaysia’s top-5 global ranking in economic performance reflects several key strengths:

• Robust export growth across goods and services

• Diversified international trade markets

• Rebound in tourism receipts post-pandemic

• Sustained trade surplus amid global volatility

These trends signal Malaysia’s successful navigation through post-pandemic recovery and rising external headwinds.

🏛️ Structural Reforms and Public Sector Efficiency

The government’s reform agenda, particularly under the Madani Economic Framework, has been pivotal. According to MITI, bureaucracy-related reform initiatives have created a ripple effect across investment facilitation and industrial development.

Two major institutional drivers of reform include:

• National Competitiveness Committee, co-chaired by MITI and the Finance Ministry, which directs national-level policy coordination

• Special Taskforce on Agency Reform (STAR), led by Chief Secretary to the Government Tan Sri Shamsul Azri Abu Bakar, which oversees implementation of over 1,000 bureaucratic simplification projects under the Reformasi Kerenah Birokrasi program

These programs streamline agency workflows, accelerate approval timelines, and improve service delivery to businesses and investors.

💬 Ministerial Perspective on Malaysia’s Growth Outlook

Tengku Datuk Seri Utama Zafrul Aziz, Minister of Investment, Trade and Industry, said the ranking reflects Malaysia’s whole-of-government approach to structural reform.

“This improvement is not just a number—it validates the deep institutional and economic reforms being undertaken. The seamless integration of reform across agencies is essential to fostering robust industrial growth and attracting high-quality investment.”

He emphasized that reforms aimed at removing red tape and boosting inter-agency efficiency are central to creating a competitive investment landscape that is regionally and globally attractive.

🌏 Global Standing and Long-Term Targets

Malaysia’s rise comes at a time when global economic competition is intensifying. Despite geopolitical tensions and macroeconomic uncertainties, Malaysia has:

• Strengthened its business operating environment

• Maintained a stable macro fiscal position

• Continued to attract high-quality foreign direct investment (FDI)

The Madani Economic Framework targets a top-12 global competitiveness ranking by 2033, and the 2025 result suggests this goal is well within reach if reform momentum is maintained.

🏗️ Private Sector Engagement and Investment Impact

Malaysia’s improved competitiveness is already yielding tangible outcomes in:

• Data centre investments from tech giants like NVIDIA and YTL

• Rapid development in the Johor-Singapore Special Economic Zone (JS-SEZ)

• Expanding high-value manufacturing and ESG-compliant commercial spaces across Greater KL and Penang

The private sector’s growing confidence reflects Malaysia’s pro-business regulatory climate and predictable policy direction.

🧠 What the World Competitiveness Ranking Measures

IMD’s WCR evaluates four core pillars:

1. Economic Performance – trade, investment, employment, and price stability

2. Government Efficiency – public finance, institutional frameworks, business legislation

3. Business Efficiency – productivity, labor market dynamics, finance, attitudes and values

4. Infrastructure – education, technology, health, and scientific infrastructure

Malaysia’s advancement in government and business efficiency reflects growing ease of doing business, improved transparency, and digitalization efforts across federal and state institutions.

🔮 Malaysia’s Competitiveness Outlook: What’s Next?

If Malaysia continues to:

• Sustain high-level governance coordination

• Accelerate digital public service reform

• Maintain fiscal discipline while supporting growth sectors

• Cultivate talent and industry-academia collaboration

…it could realistically become a top-15 competitiveness economy well before 2033.

✅ Key Takeaways

• Malaysia ranks 23rd in the IMD World Competitiveness Ranking 2025

• Achieves 4th globally in economic performance

• Gains driven by export strength, governance reforms, and business efficiency

• Reflects progress under the Madani Economic Framework and Reformasi Kerenah Birokrasi

• On track toward Top 12 global competitiveness by 2033