IPPFA lifts Malaysia’s 2026 GDP growth forecast to 5.4%
IPPFA Sdn Bhd has raised Malaysia’s 2026 GDP growth forecast to 5.4%, up from 4.6% previously.
Source: Bernama · August 29, 2026 at 6:30 AM · AI-assisted report
Single-sourceKUALA LUMPUR, 29 AUGUST 2026 —
IPPFA Sdn Bhd has raised Malaysia’s 2026 GDP growth forecast to 5.4%, up from 4.6% previously.
Market Impact
The advisory firm said the upgrade reflects stronger-than-expected first-half performance and a reassessment of underlying growth drivers. IPPFA Director of Investment Strategy and Country Economist Mohd Sedek Jantan noted first-half growth of about 5.7%, driven by 5.4% year-on-year expansion in the first quarter and 6.0% in the second quarter of 2026.
“The forecast upgrade is not simply a response to the 6.0% growth recorded in 2Q 2026,” he said. “The more important development is that Malaysia has demonstrated a higher degree of economic resilience than previously assumed.”
Jantan said growth has broadened across exports, investment and domestic demand, giving the economy a higher floor for the second half. IPPFA expects growth to moderate to 5.1% in the third quarter and 4.8% in the fourth, reflecting normalisation in external demand and base effects.
Investment remains a key pillar of the outlook. While gross fixed capital formation slowed in 2Q 2026, the composition remains supportive, particularly in machinery and equipment, ICT, data centres and other capacity-building activities.
IPPFA also trimmed its 2026 inflation forecast to 1.9% from 2.2%, citing contained headline and core inflation. July inflation was around 1.8%. “The remaining risks are concentrated in food, energy and administered prices rather than a broad-based demand-driven cycle,” Jantan said. “This matters for monetary policy because the composition of growth shapes the inflation impulse.”
The firm lifted its end-2026 US dollar-ringgit forecast to 4.02 from 4.05, citing stronger growth, resilient exports, contained inflation and improving external fundamentals. “Stronger exports provide a structural source of foreign-exchange earnings,” he said. “Investment in manufacturing, digital infrastructure and related activities strengthens Malaysia’s productive capacity.”
On equities, IPPFA raised its end-2026 target for the FTSE Bursa Malaysia KLCI to 1,800 from 1,780, citing stronger domestic fundamentals and improved earnings visibility.
Related: IPPFA Sdn Bhd · Mohd Sedek Jantan · Kuala Lumpur