Malaysia's Economic Fundamentals Remain Resilient Amid Global Cost Pressures
KUALA LUMPUR, July 27 (Bernama) -- Malaysia’s economic fundamentals remain strong despite mounting global cost pressures arising from ongoing geopolitical tensions, said the Association of Chartered Certified Accountants (ACCA).
In a statement today, it said the ACCA and Institute of Management Accountants (IMA) Global Economic Conditions Survey for the second quarter of 2026 (2Q 2026) found that while businesses worldwide continue to grapple with rising operating costs, Malaysia has weathered the global uncertainty relatively well.
“For Malaysia, higher logistics, fuel and raw material costs continued to affect businesses, particularly import-dependent sectors and small and medium enterprises.
“Nevertheless, the country’s economic fundamentals remained resilient, with inflation moderating to 1.9 per cent in June 2026, while the economy expanded by 5.8 per cent in 2Q 2026, supported by robust domestic demand and stronger manufacturing, mining and services activity,” it added.
The ACCA said the government has also continued to cushion external pressures through RM54.7 billion in subsidies, assistance and incentives this year to help stabilise prices and ease the burden on households.
ACCA’s portfolio head of Maritime Southeast Asia, Andrew Lim said Malaysia’s outlook is supported by contained inflation, steady domestic demand and targeted policy measures.
“However, businesses should remain agile and manage costs carefully as global volatility is likely to persist,” he said.
Globally, the survey revealed that the ongoing conflict in West Asia continued to weigh on the global economy, with more than three-quarters of accountants worldwide reporting higher operating costs in 2Q 2026, driven by rising commodity prices and supply chain disruptions.
The ACCA said that among chief financial officers (CFOs), 83 per cent experienced increased costs, close to the highest levels recorded in 2022 and 2023.
Despite mounting cost pressures, global confidence improved from the near-record lows recorded in 1Q 2026, reflecting the resilience of the global economy and optimism at the time of the survey over potential diplomatic progress, it added.
“However, weaker new orders, capital expenditure and employment indicators suggested global growth was slowing amid persistent inflation, geopolitical uncertainty and tighter financial conditions,” it said.
The survey also found that economic pressures were ranked as accountants’ top business risk in 2Q 2026 at 22 per cent, followed by geopolitical instability (20 per cent) and cybersecurity (14 per cent).
ACCA chief economist, Jonathan Ashworth said sharply rising costs remained a major issue for firms during the quarter.
“If businesses increasingly pass these costs on to consumers, the risk of further monetary policy tightening would rise. Despite the improvement in confidence, accountants remain cautious as uncertainty continues to define the global operating environment,” he said.
The GECS was conducted from June 3-17, 2026, receiving 647 responses, including 453 ACCA members and 194 IMA members, before the renewed escalation of the West Asia conflict later that month.
-- BERNAMA