Malaysia’s 2026 GDP growth forecast raised to 5.4%
Financial advisory firm IPPFA Sdn Bhd raised Malaysia’s 2026 gross domestic product growth forecast to 5.4% from 4.6%, citing stronger-than-expected first-half expansion and reassessed growth dynamics.
Source: RSS · August 26, 2026 at 10:31 AM · AI-assisted report
Single-sourceKUALA LUMPUR, 26 AUGUST 2026 —
Financial advisory firm IPPFA Sdn Bhd raised Malaysia’s 2026 gross domestic product growth forecast to 5.4% from 4.6%, citing stronger-than-expected first-half expansion and reassessed growth dynamics.
Market Impact
The revision follows 5.7% year-on-year growth in the first half of 2026, including 5.4% in the first quarter and 6.0% in the second quarter, IPPFA said. Mohd Sedek Jantan, IPPFA director of investment strategy and country economist, said the upgrade reflects Malaysia’s higher economic resilience than previously assumed.
“Growth has broadened across exports, investment and domestic demand, lifting the economy’s growth floor into the second half,” he said.
IPPFA expects momentum to slow to 5.1% in the third quarter and 4.8% in the fourth quarter of 2026 as external demand normalises and base effects fade.
Investment remains a pillar of the outlook. Gross fixed capital formation slowed in the second quarter, but the composition stayed supportive, particularly in machinery and equipment, ICT, data centres and other capacity-building activities.
The firm trimmed its 2026 inflation forecast to 1.9% from 2.2% as headline and core inflation stayed contained, with July inflation at about 1.8%.
“Risks now concentrate on food, energy and administered prices rather than broad-based demand-driven inflation,” Mohd Sedek said.
IPPFA also lifted its end-2026 US dollar-ringgit forecast to 4.02 from 4.05, citing stronger growth, resilient export earnings and contained inflation.
“Exports provide a structural source of foreign-exchange earnings, while manufacturing and digital infrastructure investment bolster productive capacity,” he said.
For equities, IPPFA raised the year-end 2026 target for the FTSE Bursa Malaysia KLCI to 1,800 from 1,780, citing stronger domestic fundamentals and clearer earnings visibility.
Related: IPPFA Sdn Bhd · Mohd Sedek Jantan · Kuala Lumpur