KUALA LUMPUR: Standard Chartered Global Research expects Malaysia’s economy to stay resilient in 2026, with gross domestic product (GDP) growth of 4.5% at the upper end of the government’s target range, supported by steady domestic demand, contained inflation and sustained investment momentum.
In a statement, it said it has raised its 2025 GDP forecast to 4.7% from 4.2%, driven by strong export front-loading and a recovery in mining activity.
In its 2026 economic outlook report, An Uneasy Calm, the team expects Malaysian household consumption to remain stable amid a healthy labour market, although global trade risks persist, with export normalisation likely to weigh on export growth contributions.
Inflation is expected to remain benign in 2026, with the CPI forecast cut to 1.7% from 2.3%.
It expects Bank Negara to keep the policy rate on hold at 2.75%, as global tariff uncertainty remains a key downside growth risk.
On the fiscal side, Standard Chartered Global Research said the government is projected to consolidate the deficit to 3.5% of GDP in 2026 from 3.8% in 2025.
The ringgit may also remain supported by positive domestic fundamentals and could outperform Asian low yielders in the year ahead.
Meanwhile, although global growth in 2026 is expected to stay strong at 3.4% across many economies, Standard Chartered Global Research believes the year will mark a shift from monetary support to fiscal policy, and from export-driven growth towards more domestically led — especially investment-driven — growth.
Steady headline growth, however, hides important changes in growth drivers, with risks still elevated due to ongoing trade policy uncertainty, geopolitical tensions and concerns over financial-market corrections, raising the chances of more extreme outcomes.
Standard Chartered Global Research said growth in Asia’s export-oriented economies has held up better than expected in 2025, supported by strong front-loading of exports to the US.
“It is expected that this front-loading activity will fade in 2026, implying less support for growth from the external sector. Political uncertainty may also weigh on growth in some countries, such as Thailand and the Philippines.
“As a result, Asia is one of the few regions where growth may moderate in 2026 versus 2025, but it remains the fastest growing region in the world,” it said.
Standard Chartered Global Research has raised its 2026 growth forecast to 2.3%, citing strong business investment, AI-driven spending and supportive fiscal conditions.
For the US, the team has raised its 2026 growth forecast to 2.3%, supported by strong business investment, AI-driven spending and favourable fiscal measures.
For China, the 2026 growth forecast has been lifted to 4.6%, as exports have held up better than expected despite ongoing trade risks with the US.
