SHAH ALAM, Nov 25 — Selangor is strengthening its status as Malaysia’s most dynamic and resilient state economy, backed by solid growth, robust labour market, and controlled inflation, according to Bank Muamalat’s findings on the recent 2026 Selangor Budget.
On the economic momentum, the report found that Selangor continues to outperform the nation with its financial performance averaging 1.33 times faster than Malaysia’s gross domestic product (GDP) growth, reflecting its structural advantages in manufacturing, logistics, services, technology, and consumer-driven sectors.
“Selangor remains Malaysia’s economic powerhouse, recording a GDP (gross domestic product) of RM432.1 billion in 2024, representing 26.2 per cent of the national economy,” the report read.
It said Selangor firmly holds the position as Malaysia’s largest state economy, ahead of Kuala Lumpur (RM265.8 billion), Johor (RM158 billion), Sarawak (RM148.2 billion), and Penang (RM121.5 billion).
In 2024, Selangor’s GDP grew by 6.3 per cent year-on-year, outpacing the national growth rate of 5.1 per cent.
It added that the state’s labour market also remains among the strongest nationwide.
“Selangor’s labour market remains one of the strongest in Malaysia, with the unemployment rate consistently below its long-term average of 2.9 per cent since 2017,” it said.
Consistent surplus budgets
On November 14, Selangor tabled its RM3.23 billion budget themed “Selangor Champions, People Prosper”, reinforcing the state’s ambition to lead in economic performance while ensuring social well-being.
The state budget, larger than this year’s RM3 billion, reflects a more expansionary fiscal stance to support growth, resilience, and development.
Of the total, RM1.86 billion or 58 per cent has been allocated for operating expenditure, comprising RM651.28 million for emoluments, RM739.7 million for supplies and services, RM22.48 million for assets, RM426.75 million for grants and fixed charges, and RM19.79 million for miscellaneous expenses.
“The state has consistently recorded budget surpluses over several years, supported by disciplined expenditure and resilient revenue performance.
“Its debt level remains low, indicating prudent financial governance and its ability to sustain development spending without compromising fiscal stability,” the report added.
Inflation remains controlled
Bank Muamalat said that the latest figures show unemployment easing to 1.8 per cent in the third quarter this year, indicating a tight labour market and strong job absorption capacity, driven by the expansion of industrial, services, and technology sectors.
“Despite tighter labour conditions, inflation has remained benign, trending down to 1.5 per cent for the first 10 months of 2025, compared with 2.2 per cent in 2024.
“This demonstrates that stronger employment has not translated into demand-driven inflation, partly due to improved supply chain efficiency, stable commodity prices, and productive investments that have eased supply-side constraints,” it said, projecting that the outlook for the state remains firmly positive.
Bank Muamalat expects the state’s economy to grow 5.4 per cent this year, in line with steady domestic demand and continued investment inflows.
The Selangor government anticipates growth of between 5 per cent and 5.5 per cent this year, exceeding Malaysia’s national outlook of 4 per cent to 4.5 per cent.
Bank Muamalat said these trends strengthen Selangor’s standing as the nation’s most dynamic, diversified, and investment-led state economy.
