IPPFA Maintains Malaysia's 2026 GDP Growth Forecast At 4.6 Pct Despite Global Uncertainty
KUALA LUMPUR, July 2 (Bernama) -- IPP Financial Advisers (IPPFA) has maintained its 2026 Malaysia gross domestic product (GDP) growth forecast at 4.6 per cent despite global uncertainty, supported by resilient domestic demand, private investment and a gradual recovery in external trade.
IPPFA director of investment strategy and country economist, Mohd Sedek Jantan, said Malaysia remains one of the principal beneficiaries of the ongoing reconfiguration of global supply chains as multinational corporations continue diversifying manufacturing operations and strengthening production resilience across Asia.
“Malaysia's well-established semiconductor ecosystem, expanding data centre investments, growing artificial intelligence (AI) infrastructure and improving investment climate continue to position the country favourably to capture high-value manufacturing and technology investments,” he said while presenting IPPFA's 2H 2026 Economic and Market Outlook Webinar, themed "The Great Geoeconomics Rewire", today.
Mohd Sedek said while external uncertainties remained elevated, Malaysia's growth drivers had become increasingly diversified.
“Domestic consumption continues to provide a solid foundation, while investment activity remains supported by semiconductor expansion, AI-related investments, digital infrastructure and continued implementation of national development initiatives,” he said.
He said IPPFA expects exports to reach about RM1.8 trillion in 2026 on stronger demand for electrical and electronics products, semiconductor exports and recovering global manufacturing, while imports are projected at around RM1.6 trillion, driven by stronger domestic investment, continued capital expenditure and sustained imports of machinery and intermediate goods.
“Consequently, total trade is expected to expand by approximately 11 per cent, while Malaysia's trade surplus is forecast to recover towards RM200 billion, reinforcing the country's strong external position,” he said.
He added that IPPFA believes Malaysia will continue to benefit from structural shifts in global manufacturing as companies diversify production away from single-country concentration risks.
“Malaysia is no longer competing solely on labour costs. Increasingly, the country is attracting investments because of its established semiconductor ecosystem, skilled workforce, strategic location and growing role in advanced manufacturing and AI supply chains," he said.
Mohd Sedek also said IPPFA expects Malaysia's inflationary pressures to remain well contained despite continued global uncertainties, with headline inflation forecast to average 2.0 per cent in 2026, supported by stable domestic demand, easing global commodity prices and contained imported inflation.
“The organisation also projects the unemployment rate to improve further to 2.8 per cent, reflecting continued expansion in employment opportunities as investment activity accelerates across manufacturing, construction and services,” he said.
On the ringgit, Mohd Sedek said IPPFA maintains a constructive medium-term outlook, supported by Malaysia's improving macroeconomic fundamentals, healthy external position and resilient foreign investment inflows.
“However, it will remain challenging for the ringgit to sustain levels below RM4.00 against the US dollar, despite improving domestic fundamentals.
“The United States (US) Federal Reserve's (Fed) higher-for-longer monetary policy stance, relatively elevated global interest rates and persistent geopolitical uncertainty are expected to continue supporting demand for US dollar assets,” he said.
On the domestic equity market, he said IPPFA remains constructive, expecting the FBM KLCI to end 2026 at around 1,780 points, supported by improving corporate earnings, resilient domestic demand and sustained foreign direct investment.
Meanwhile, Mohd Sedek said IPPFA has identified four structural investment themes expected to shape financial markets in the second half of 2026 and beyond, namely "Higher-for-Longer Supports USD", "Strategic Emerging Markets", "AI as a Strategic National Priority" and "Resource Security".
He said the themes reflect expectations of elevated US interest rates, opportunities from global supply chain diversification, growing investment in AI infrastructure, and rising demand for critical minerals and energy infrastructure, respectively.
Looking ahead, he said IPPFA expects the combination of AI, strategic manufacturing, supply-chain diversification and resource security to remain the principal drivers of global capital allocation over the coming decade.
“The defining question for investors is no longer whether economic growth will accelerate or slow, but where governments are directing capital, which industries are becoming strategically important and how businesses are adapting to an increasingly fragmented global economy," added Mohd Sedek.
--BERNAMA