Sabah GDP 2026 — RM88.8B, Growth by Sector

What is GDP and why it matters for Sabah

Gross Domestic Product (GDP) is the total value of all goods and services produced within Sabah in a year. It is the primary measure of economic size and capacity. Sabah’s RM88.8 billion GDP (2025) ranks it 7th among Malaysia’s state economies — behind Selangor, Kuala Lumpur, Johor, Sarawak, Penang and Perak — and per capita GDP is just RM31,125, roughly 53% of the national average of RM59,167, far below Selangor or Penang.

This gap tells a crucial story: Sabah is resource-rich but income-poor. The state exports vast quantities of palm oil and petroleum, but much of the profit flows to federal entities (PETRONAS), multinational corporations, or is captured by a small elite. The bulk of Sabahans earn modest incomes in services, agriculture, or informal employment.

Sectoral breakdown and growth drivers

Sabah’s economy is organised into five main sectors. Understanding their relative size and growth trajectories is key to anticipating economic trends:

Services Sector (52.1% of GDP) — The Growth Engine

Services encompass government, retail and wholesale trade, hospitality, finance, transport, and telecommunications. It is Sabah’s largest sector and now the primary growth driver, expanding 4.5% in 2025 (2024: 4.2%). Within services, the standout is tourism: on DOSM’s latest satellite account (2024), tourism industries added RM13.7 billion in value — 12% of state GDP — with that value up 4.2% and tourism employment up 6.9%. Total visitor arrivals hit 3,793,709 in 2025, up 20.5% on 2024, of which 1,498,709 were international.

Agriculture Sector (~14% of GDP) — Volatile and Declining

Dominated by palm oil, with smaller contributions from rubber, fisheries and aquaculture, timber, paddy and cocoa. Agriculture recovered 0.9% in 2025 after contracting 3.2% in 2024. Sabah's crude palm oil output fell 5.2% to 4.27 million tonnes in 2024, then rose 3.2% to 4.41 million tonnes in 2025 (MPOB).

Cocoa is now a very small crop: Sabah produced an estimated 271 tonnes of cocoa beans in 2022, from 3,444 hectares (Malaysian Cocoa Board). Paddy production was between 107,565 and 122,390 tonnes a year in 2017–2022 (DOSM), but Sabah produces only about 22.8% of the rice it needs (Chief Minister, May 2025), an ongoing food security concern; see food self-sufficiency in Sabah.

Manufacturing Sector — Underdeveloped

Manufacturing is limited to palm oil processing mills, basic wood products, food and beverage processing, and non-metallic minerals. The sector grew 5.0% in 2025 (2024: 1.2%) — improving, but from a small base. Sabah lacks a robust industrial base, partly due to high logistics costs and competition with Peninsular manufacturers.

Mining & Quarrying (22.0% of GDP) — Petroleum-Dependent

Dominated by offshore oil and natural gas extraction. Malaysia does not publish current oil output by state (see Sabah petroleum figures). Output swings with project cycles: the sector contracted 4.9% in 2024, then rebounded 4.9% in 2025. Future growth depends on major projects: Shell’s deepwater work (Gumusut-Kakap Phase 4, producing since March 2025 and expected to average about 21,000 boe/d) and PETRONAS’s PFLNG 3 floating LNG plant, targeting 2H 2027 commissioning.

Construction — Cyclical and Project-Driven

Construction surged 28.3% in 2025 (2024: 21.5%), driven by Pan Borneo Highway expansion, port upgrades, and real estate development. However, this sector is volatile — growth depends on government budget allocation and private investment cycles, not underlying economic fundamentals.

Sabah's GDP targets to 2030

The 13th Malaysia Plan sets Sabah's GDP to grow 5.8% a year in 2026–2030, from RM84.3 billion in 2024 to RM120.1 billion in 2030 at constant 2015 prices, and GDP per capita from RM30,605 to RM48,200.

Source: 13th Malaysia Plan, Appendix Table 5 (p.A-9), at constant 2015 prices. The 2021–2025 averages include a Ministry of Economy estimate for 2025.

Household income: the plan's appendix puts Sabah's median monthly household income at RM4,861 in 2024 (preliminary), against RM7,064 for Malaysia, up from RM2,860 in 2012 (Table 12, p.A-18). Its regional target for Sabah is a median of RM5,780 by 2030, from RM4,921 in 2024 (p.3-25). See household income in Sabah.

Status as of September 2026: these are plan targets. For comparison, DOSM reported Sabah's growth at 5.1% in 2025.

Economic output by district

DOSM does not publish GDP broken down by district, so no reliable district split exists. Qualitatively, economic activity is concentrated in Kota Kinabalu — the capital, main port, tourism hub and financial centre — followed by Tawau, Sandakan and Lahad Datu, which are centres for agricultural processing and trade.

The interior districts (Pensiangan, Nabawan, Tongod, Kundasang) are sparsely populated and contribute little to formal GDP, though subsistence farming and informal trade are significant to local livelihoods.

Sabah vs Sarawak: A regional comparison

Sarawak, Malaysia’s other major East Malaysian state, has a larger economy (RM153.5B vs RM88.8B in 2025) despite similar population size and natural resource endowments. Key differences:

• Manufacturing base: Sarawak has petrochemical plants, cement factories, and aluminium smelting. Sabah has mainly commodity processing.
• Infrastructure: Sarawak has invested heavily in ports (Kuching, Sibu, Bintulu) and highways, lowering logistics costs relative to Sabah.
• Petroleum payments: Sabah and Sarawak both receive a 5% cash payment on petroleum produced, under agreements with PETRONAS (Forum of Federations). The difference between the two economies is not the royalty rate. (Sabah’s separate 40% special grant claim under Article 112D is before the courts.)
• Poverty: Sarawak’s poverty rate (8.4%) is far below Sabah’s (17.7%, DOSM 2024), suggesting more inclusive growth.

The federal New Industrial Master Plan 2030 also wants Sabah's oil and gas, timber, minerals and palm oil processed at home instead of exported raw; see Sabah in NETR and NIMP 2030.

Frequently asked questions