KUALA LUMPUR: Malaysia’s economy is expected to expand by 5.5% to 6% in the second quarter of 2026, with strong interest from foreign investors and higher foreign and domestic investment expected, said KSI Strategic Institute for Asia Pacific president Tan Sri Michael Yeoh.
He said the forecast was consistent with the 5.8% growth recorded in the advance estimate for second-quarter gross domestic product (GDP), with the overall economic outlook remaining positive despite rising living costs and inflationary pressures from higher oil prices.
“Our own expectation is also between 5.5% to 6%. So 5.8 falls within our range. Generally, signs are quite good that the country is on the right track economically,” Yeoh told reporters at the 2026 Human Resources Leadership, Talent & Top Employers Forum today.
Yeoh said Malaysia was seeing strong interest from foreign investors, with both foreign and domestic investment expected to increase.
“We are expecting an increase in investment, both foreign investment and domestic investment,” he said.
On the full-year outlook, Yeoh said overall GDP growth was expected to be around 5.5% to 5.6%.
He commented that Budget 2027 should focus on fiscal consolidation while giving sufficient attention to key sectors and cost-of-living pressures.
“I think the government will have to focus on consolidating the budget, on being able to ensure that all the key sectors are looked into, and that the cost of living is given enough emphasis,” he said.
Yeoh said the government also needed to consider the rising cost of oil subsidies while maintaining development expenditure.
“At the same time, I think the country has to continue spending on development expenditure,” he said.
He identified education and healthcare as priority areas for development spending, alongside defence and security.
On the future of human resource management, Yeoh said Malaysia needed to develop talent while integrating talent management with technology.
“I think it’s very important in Malaysia to be able to develop talent, to be able to integrate talent management with technology,” he said.
He said the future of human resource management and leadership could be built around what he described as the “three Ts” — Talent, Technology and Trust.
“I think that will be the future for human resource management and for leadership in the country,” he said.
