Malaysia's Economy Stays Resilient Despite Global Uncertainty - Amir Hamzah - Portal Rasmi Kementerian Kewangan

PUTRAJAYA, 14 AUGUST 2026 —

Malaysia’s Economy Defies Global Headwinds with Steady Growth, Says Finance Minister

Speaking at the launch of the GEAR-uP Progress Report press conference, Amir Hamzah highlighted that the country’s gross domestic product (GDP) expanded by 5.2% in 2024 and matched that growth rate in 2025. The first quarter of 2026 saw GDP growth accelerate to 5.4%, with an advance estimate for the second quarter projecting a further increase to 5.8%.

The average growth for the first half of 2026 stands at 5.6%, defying a backdrop of trade disputes and regional conflicts.

“If we look at it overall, the Malaysian economy is strong,” Amir Hamzah said. “In 2024, 5.2% GDP growth. In 2025, 5.2%. This year, the first quarter was 5.4%, and the advance estimate we have for the second quarter is 5.8%. This means that this year we have reached 5.6%. This is in an uncertain environment.

Last year we had trade issues with the trade wars, and this year we have issues that exist in West Asia—but Malaysia is still resilient, still growing, still moving to become a developed country.”

The sustained expansion reflects the effectiveness of the MADANI Economy Framework, a government initiative aimed at inclusive and sustainable growth. Amir Hamzah attributed the positive performance to the implementation of the GEAR-uP programme, a Ministry of Finance-led initiative launched in 2024 to stimulate domestic direct investment (DDI) through targeted interventions.

Under GEAR-uP, the government has committed RM120 billion in domestic investments from 2024 to 2028. This funding is channelled through government-linked investment companies (GLICs) and government-linked companies (GLCs), which act as catalysts for industrial development, talent acquisition, and foreign capital inflows.

“They [GLICs] help industries in the country to get talents—talents that can be used better—and attract others to come to Malaysia with funds, with know-how to help the country develop,” Amir Hamzah explained. “This is the effort we want, because if we want to find money, we can get that money, but without a more solid approach, without a good approach, our effort may be limited to bringing funds into the country.

The important thing is that when the funds are used, the people get the benefits that are presented. Malaysia can develop into a more developed country in the future.”

The minister also underscored the role of the MADANI Economy agenda in aligning economic policies with social well-being, ensuring that growth translates into tangible improvements for citizens. He expressed confidence that Malaysia is on track to achieve its long-term development goals, provided all stakeholders continue to collaborate effectively.

“I am happy with what I have seen. We are on the right track, and insya-Allah the country will become more mature in the future,” he said.

Malaysia’s economic resilience contrasts with broader global challenges, including supply chain disruptions, fluctuating commodity prices, and geopolitical instability in the Middle East. Despite these pressures, the country’s diversified economy—supported by strong domestic demand, a growing services sector, and sustained manufacturing output—has helped cushion external shocks.

The government’s focus on high-impact sectors such as digital economy, green technology, and high-value manufacturing has further reinforced growth prospects. According to official data, the services sector contributed approximately 58% to GDP in the first half of 2026, followed by manufacturing at 24% and agriculture at 7%. The unemployment rate remained stable at 3.3%, while inflation was contained at 2.8% year-on-year in June 2026.

Regional peers have also taken note of Malaysia’s performance. While some Southeast Asian economies grappled with slower growth due to weak external demand, Malaysia’s proactive fiscal measures and investment-led strategy have positioned it as a relative outperformer in the region.

Economists have cautiously welcomed the government’s approach. Dr. Yeah Kim Leng, an economics professor at Sunway University, noted that Malaysia’s ability to sustain growth above 5% amid global headwinds reflects effective macroeconomic management. “The focus on domestic investment and structural reforms has helped mitigate external vulnerabilities,” he said. “However, sustaining this momentum will require continued efforts to enhance productivity and attract high-quality foreign direct investment.”

Business leaders echoed similar sentiments. Tan Sri Abdul Rahman Hamid, Chairman of the Malaysian Employers Federation, highlighted the importance of policy consistency and infrastructure development in maintaining investor confidence. “The RM120 billion commitment under GEAR-uP is a strong signal to the market,” he said. “But execution speed and transparency will determine whether we can fully capitalise on these opportunities.”

Looking ahead, the government has set a target of achieving high-income nation status by 2028, a goal that will require GDP growth to average at least 5.5% annually over the next two years. To meet this target, the Ministry of Finance has outlined several priority areas, including upskilling the workforce, accelerating digital transformation, and expanding high-tech industries.

Amir Hamzah reiterated that the MADANI Economy framework remains the cornerstone of this strategy. “We are not just chasing numbers,” he said. “We are building an economy that is inclusive, sustainable, and resilient. Every ringgit invested must create value for the people and the nation.”

As Malaysia navigates an increasingly complex global landscape, the government’s emphasis on domestic-driven growth and structural reforms appears to be paying off. With growth forecasts for 2026 revised upwards to 5.7% by the central bank, the outlook remains cautiously optimistic—provided external risks do not escalate further.

For now, Malaysia’s economic resilience serves as a testament to its ability to adapt and thrive, even in uncertain times. The coming quarters will be critical in determining whether this momentum can be sustained and translated into long-term prosperity for all Malaysians.

Related: Ministry of Finance · Amir Hamzah · Putrajaya