Malaysia GDP Can Grow Above 5 Pct In 2026, Expectation Not Overly Optimistic - Economist
By Harizah Hanim Mohamed
KUALA LUMPUR, Aug 19 (Bernama) -- Expectations for Malaysia’s economy to grow by more than five per cent in 2026 are not overly optimistic, given its strong first-half performance, resilient global trade and rising foreign direct investment (FDI), particularly in data centres, semiconductors and artificial intelligence (AI).
Williams Business Consultancy Sdn Bhd economist Dr Geoffrey Williams said Malaysia's normal economic growth rate is somewhere between 4.5 and 5 per cent in the absence of major disruptions.
"However, we have seen a massive increase in trade and FDI, with data centres, semiconductors, AI, and that is pushing economic growth higher.
"We are seeing global trade holding up. Global growth is higher than people had expected at the beginning of the year," he told Bernama on the sidelines of Logisym Malaysia 2026, a leading logistics and supply chain symposium focusing on digitalisation, here today.
Williams said Malaysia's strong first-half economic performance has already provided a solid base for full-year growth, supported mainly by government policies that have kept petrol and diesel prices stable despite higher global oil prices.
"Because the first half of the year was strong, government policy has actually been a factor (that supported the economy), where the government has been clear to keep petrol prices and diesel prices constant; that means consumers and businesses have not been worried too much about the impact of the higher oil prices globally.
"That has given strong growth in the first half. Hence, we do not expect anything to change in the second half," he said.
Williams said even if the economy grows at normal rates in the second half, Malaysia would likely reach the upper end of the government's four to five per cent growth forecast.
"I believe it will be a little bit higher than five per cent, which will be good, because there is nothing in particular that will slow down the economy in the second half," he said.
Bank Negara Malaysia (BNM) stated last week that there is no need to revise Malaysia’s 2026 gross domestic product (GDP) growth forecast at this juncture, and remains confident that growth will likely settle around five per cent.
BNM Governor Datuk Seri Abdul Rasheed Ghaffour said any revisions will normally happen during the Budget 2027 announcement.
"We have been experiencing growth above our expectations for the last three quarters,” he was quoted as saying.
Williams also said global conditions continue to support Malaysia's growth outlook, with global trade holding up despite geopolitical uncertainties.
He noted that projections for annual global trade growth in 2026 have increased to 3.5 per cent from 2.8 per cent previously, while growth next year is expected to pick up to 4.3 per cent from an earlier forecast of 3.8 per cent.
Williams said businesses and global supply chains have become more agile in dealing with repeated shocks, while strong technology-related activities are helping to counter weakness in more traditional economic activities.
-- BERNAMA