KUALA LUMPUR: Kenanga Investment Bank Bhd
today revised its 2026 gross domestic product (GDP) growth forecast to 4.5 per cent from 4.2 per cent to reflect stronger-than-expected momentum in 2025, which may carry into this year.
In a note today, the investment bank noted that steady domestic demand and stronger services exports, bolstered by Visit Malaysia 2026, could help offset softer goods exports.
"Additional support will also come from Budget 2026 and major development initiatives under the 13th Malaysia Plan (13MP), which are expected to sustain domestic growth over the coming years.
"Nonetheless, we remain cautiously optimistic given persistent downside risk," it said.
Kenanga Investment has anticipated that the balance of risks continued to lean toward external uncertainties, including the delayed impact of higher United States tariffs, China’s slower-than-expected recovery, intensifying geopolitical tensions and volatile global commodity prices.
"Domestically, risks remained manageable. Ongoing government reforms, particularly targeted subsidy rationalisation has had limited inflationary effects so far, helping sustain consumer sentiment and spending," it said.
Kenanga Investment has also revised its fourth quarter (4Q) 2025 GDP growth estimate to 5.5 per cent from 5.0 per cent, with full-year 2025 growth to settle at 4.9 per cent against 4.8 per cent previously, following the release of the advance GDP estimate by the Statistics Department of Malaysia today.
Growth remains anchored by domestic-oriented sectors, particularly services and construction, supported by rising household incomes from government salary hikes, a lower unemployment rate, the realisation of approved investment, and continued targeted cash transfers, it said.
"A favourable policy rate also supports private consumption, reinforcing Malaysia’s domestic demand story," it added. - Bernama
