HLIB Lifts Malaysia’s 2026 GDP Forecast To 4.7 Pct On Strong E&E Exports
KUALA LUMPUR, July 15 (Bernama) -- Stronger-than-expected electrical and electronics (E&E) exports and robust global semiconductor demand have prompted Hong Leong Investment Bank (HLIB) to raise Malaysia’s 2026 gross domestic product (GDP) growth forecast to 4.7 per cent from 4.5 per cent previously.
However, the investment bank expects economic growth to moderate in the second half of the year (2H2026).
Speaking during an economic briefing organised virtually by the Institute of Chartered Accountants in England and Wales (ICAEW) Malaysia today, HLIB chief economist Felicia Ling said second-quarter (2Q2026) GDP growth is expected to exceed five per cent, bringing 1H2026 growth to around five per cent before growth eases in 2H2026.
She said the revised forecast remains within the government’s official growth range of four to five per cent.
Ling said the manufacturing sector remains the key driver of the upgraded outlook, supported by stronger export performance, particularly in the E&E industry, alongside continued resilience in the services and construction sectors.
She said the E&E sector, which accounts for more than 40 per cent of Malaysia’s total exports, continues to benefit from robust global semiconductor demand driven by artificial intelligence (AI) infrastructure, data centres and advanced computing systems.
Ling said global semiconductor sales gained strong momentum towards the end of 2025 and have continued into 2026, supporting Malaysia’s E&E exports.
She added that the World Semiconductor Trade Statistics organisation expects global semiconductor sales to expand by 19 per cent this year, led mainly by memory chips, providing a favourable backdrop for Malaysia’s export-oriented manufacturing sector.
“Malaysia’s story is in line with the global semiconductor story whereby we’re seeing an increase in global semiconductor sales coming from memory as well.
“But there are also other sectors that are also driving the exports in E&E and that is data storage, smart cards, memory cards, telephone communication devices and printed circuit boards as well,” she said.
She noted that while headline export growth has been supported by rising re-export activity in recent years, both domestic exports and re-exports strengthened in May, signalling broader-based export momentum.
“When domestic exports pick up, this will be positive for our industrial production data as well and this is positive for Malaysia’s growth,” she said.
On domestic demand, Ling said private consumption is expected to remain resilient, underpinned by continued household loan growth, healthy credit card spending, positive wage growth and a historically low unemployment rate of three per cent.
She pointed out that the government’s decision to maintain the RON95 subsidised petrol price at RM1.99 per litre and diesel at RM2.10 per litre would continue to support household spending.
Meanwhile, Ling said construction activity continues to benefit from strong investment momentum, particularly in data centre-related projects, although investment growth is expected to moderate in 2H2026 due mainly to high base effects after last year’s strong expansion.
She said that approved investments remained elevated, led by the services sector, with information and communications technology continuing to account for a significant share of new investment.
On the Overnight Policy Rate (OPR), she said that Bank Negara Malaysia is expected to maintain the rate at 2.75 per cent for the remainder of 2026 as inflation is projected to average two per cent, remaining within the central bank’s official forecast range of 1.5 per cent to 2.5 per cent.
-- BERNAMA