Malaysia's 2026 GDP growth forecast may be revised up to exceed 5%
Malaysia’s economy could grow more than 5% in 2026 after a stronger-than-expected second quarter, MBSB Investment Bank Bhd said.
Source: The Star · August 6, 2026 at 5:06 PM · AI-assisted report
Single-sourceKUALA LUMPUR, 7 AUGUST 2026 —
Malaysia’s economy could grow more than 5% in 2026 after a stronger-than-expected second quarter, MBSB Investment Bank Bhd said.
Market Impact
The bank now expects gross domestic product to exceed its previous forecast of 4.5% after second-quarter growth accelerated to 5.8% year-on-year from 5.4% in the first quarter. Robust exports and resilient domestic consumption are the main drivers, supported by a stable labour market, rising incomes and government policy measures such as cash transfers and targeted subsidies, it said.
MBSB Investment Bank also cited higher tourist arrivals as an additional boost to consumption. The bank warned, however, that downside risks remain, including renewed supply disruptions that could keep cost pressures elevated and weaker final demand from domestic and external markets amid higher inflation.
Kenanga Investment Bank Bhd separately said it expects Malaysia’s economy to expand more than 5% this year, above its current forecast range of 4.5% to 5.0%. The manufacturing sector’s purchasing managers’ index held steady at 50.7 in July, indicating continued expansion, it said.
Kenanga added that resilient new orders supported an upward revision to its third-quarter GDP growth forecast. However, it noted weaker business confidence, which fell to a three-month low, and a 0.2% year-on-year decline in employment in July, suggesting manufacturers remain cautious amid persistent geopolitical risks.
Related: MBSB Investment Bank Bhd