Malaysia's E&E exports sustaining 2H growth amid resilient global tech cycle — CGS International
Malaysia’s electrical and electronics exports are sustaining second-half growth as the global artificial intelligence investment cycle offsets recent tech-stock pullbacks, CGS International Securities Malaysia said on…
Source: The Edge Malaysia · August 4, 2026 at 4:27 PM · AI-assisted report
Single-source
MALAYSIA, 5 AUGUST 2026 —
Malaysia’s electrical and electronics exports are sustaining second-half growth as the global artificial intelligence investment cycle offsets recent tech-stock pullbacks, CGS International Securities Malaysia said on Tuesday.
Market Impact
CGS International economics and research head Ahmad Nazmi Idrus told reporters at The Invest Shariah 2026 conference that Malaysia’s E&E export performance typically lags global tech cycles by several months, meaning current shipments reflect earlier strength in AI infrastructure investment.
“What you are seeing in Malaysia’s E&E exports today is essentially a reflection of what happened globally a few months ago,” Ahmad Nazmi said. “While technology stocks have corrected, the broader technology sector remains fundamentally strong.”
He expects the technology sector to continue performing well through the second half of 2026 and into early 2027, provided global tech markets do not suffer a sharp correction.
Ahmad Nazmi noted that sustained AI infrastructure spending worldwide should maintain demand for Malaysia’s semiconductor and electronics products, keeping export growth on track.
Malaysia’s services balance has flipped to surplus for several consecutive quarters after 15 years in deficit, he said.
The turnaround is mainly due to stronger travel and transportation receipts, signalling a steady rebound in tourism and cross-border activity.
“Services have been in deficit for 15 years. The rebound is largely driven by travel and transport,” he said.
On investment, Ahmad Nazmi said Malaysia should ensure that inflows into data centres generate broader economic benefits beyond construction.
While data centres are a new engine of growth, he noted that once operational they create relatively limited local employment.
He urged policymakers to attract AI-related regional headquarters and research centres, and to encourage greater participation by local suppliers in the data centre value chain to maximise spillover effects.
“The question is what happens after the data centres are completed,” he said. “The focus should be on downstream AI activities and increasing local industry participation.”
A clearer investment roadmap is expected later this year when the government unveils a new industrial roadmap.
The plan should set priority sectors and investment incentives, supporting momentum beyond 2026.
Ahmad Nazmi described private consumption as resilient but moderate, noting that wage growth has not fully caught up with rising living and education costs.
“Consumption is not weak, but it is moderate,” he said. “Much of Malaysia’s current strength is driven by exports and investments rather than domestic spending.”
Against this backdrop, he expects Bank Negara Malaysia to leave the overnight policy rate unchanged at 2.75% for the rest of 2026.
Ahmad Nazmi said the current growth pace does not require tighter policy, given manageable inflation and no signs of overheating.
Bank Negara Malaysia last adjusted the OPR on July 9, 2026, leaving it at 2.75% after a 25-basis-point cut in July 2025.
On the ringgit, Ahmad Nazmi expects the currency to trade around RM3.95 to the US dollar by year-end, assuming both Bank Negara Malaysia and the US Federal Reserve hold rates steady through 2026, with the possibility of US easing next year.
“Overall, the ringgit is likely to remain range-bound, although periods of volatility may occur as markets respond to external developments,” he said.
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