Narrowing the gaps in economic opportunity

By the Editorial Team · Tuesday, October 6, 2026

Sabah’s economy grew by 5.1% in 2025, reaching a GDP of RM88.8 billion and nearly matching the national growth rate. Despite this progress, persistent income gaps, higher poverty rates, and significant infrastructure challenges mean sustained efforts are needed to ensure more inclusive and balanced development in the state.

Sabah’s economy showed notable growth in 2025, expanding by 5.1% to reach a gross domestic product (GDP) of RM88.8 billion, according to data released by the Department of Statistics Malaysia (DOSM). This marked a sharp improvement from the 1.2% growth recorded in 2024 and came close to the national GDP growth rate of 5.2% for the same period. While the increase offers grounds for optimism among Sabahans, experts caution that matching national growth rates alone does not necessarily indicate the state is closing its economic gap with the rest of Malaysia.

Economic growth measured by GDP indicates overall expansion but does not provide insight into income distribution or living standards. In 2024, Sabah’s median monthly gross household income stood at RM4,890, roughly 30% below the national median of RM7,017. This disparity highlights persistent regional income gaps despite the recent gains.

The state’s poverty rate also remains higher than the national average, though improvements have been recorded. Sabah’s absolute poverty rate fell from 19.7% in 2022 to 17.7% in 2024, compared with a national reduction from 6.2% to 5.1% over the same timeframe. While the decline in poverty is a positive sign, the sizeable difference underscores ongoing challenges.

Addressing these challenges requires more than maintaining strong headline growth figures. Sabah continues to confront significant infrastructure deficiencies, particularly in road connectivity and access to reliable electricity, clean water, and internet services. These infrastructure gaps impact the cost of doing business, limit market access, and restrict economic participation by households and communities in the state.

National-level policies are beginning to prioritize these issues. The Thirteenth Malaysia Plan emphasizes balanced regional development, while the federal government’s pre-Budget statement for 2027 has highlighted narrowing development gaps—including basic infrastructure deficits in Sabah and Sarawak—as a key objective.

Ultimately, progress will depend on how effectively Sabah’s own development strategies align with these federal initiatives to translate economic growth into enduring improvements in income, poverty reduction, infrastructure, and broader opportunity. While the recent performance offers encouragement, sustained and inclusive development will be essential for Sabah to truly catch up with the national economy over time.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.