PETALING JAYA: Malaysia retained its 4%-5% GDP growth forecast for 2026 despite the economy expanding 5.7% in the first half, as geopolitical tensions, global supply disruptions and cost pressures cloud the outlook.
The economy grew 6% in Q2’26, accelerating from 5.4% in Q1’26 and exceeding the Department of Statistics Malaysia’s advance estimate and Bloomberg’s median forecast of 5.8%. It was Malaysia’s strongest second-quarter growth outside the pandemic period since 2014.
The Ministry of Finance said continued geopolitical uncertainty, supply-chain disruptions, higher input and food prices, and employment pressures in certain sectors remained key risks.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said Malaysia was not immune to global disruptions despite encouraging headline indicators.
“While the headline economic indicators remain encouraging, we recognise that many Malaysians continue to face pressures from the cost of living, while some workers and businesses are navigating a more difficult operating environment,” he said in a statement.
Growth was supported by private consumption, investment and strong demand for E&E and petroleum products. Total trade rose 34.1% to RM1 trillion, while the trade surplus widened more than five-fold to RM84 billion.
Inflation remained at 1.9% in Q2’26, while the unemployment rate stood at 3%.
Looking ahead, MOF said demand for E&E, the technology upcycle, AI, digitalisation and investments in data centres and critical infrastructure would continue to support growth.
