KUALA LUMPUR: S&P Global Ratings has lifted its 2026 gross domestic product (GDP) growth forecast for Asia-Pacific to 4.3% from 4.0%, with the Malaysian economy now projected to grow at a faster pace of 4.5%.
In its Economic Outlook Asia-Pacific First Quarter 2026: Signs of Relief report, S&P cited resilient demand, stronger technology exports and reduced tariff uncertainty for the improved regional outlook.
“We think a tentative thaw in United States-China ties and, in many economies, resilient domestic demand should help Asia-Pacific growth hold up in 2026,” the credit rating agency said.
Malaysia’s GDP growth has been revised upwards by 0.2 percentage points (ppts) to 4.5% in 2026, with consumer inflation at 1.9% and policy rate steady at 2.75%.
For China, S&P raised its 2026 GDP forecast to 4.4% from 4.0% previously due to a reduction in US tariffs on the country and the economic resilience shown in the third quarter of 2025 (3Q25).
For Asia, excluding China, the rating agency said both exports and domestic demand generally held up well through 3Q25, supported by strong shipments of technology products such as semiconductors.
“We still expect a slowdown in much of the region in 2026, stemming from the US tariffs. But we have revised up our export forecasts on an improved outlook for tech exports and the relatively favourable outcome of the United States-China negotiations.
“In all, we have raised our 2025 GDP growth forecasts for Asia-Pacific, excluding China, by 0.2 ppts to 4.4% and the 2026 one by 0.2 ppts to 4.2%,” it added.
However, S&P said that it expects uncertainty around US tariffs to remain in 2026, in part because of indications that the US administration may use tariffs for political purposes although visibility has improved. — Bernama
