GEORGETOWN: Despite rising geopolitical uncertainties, a sustained global semiconductor upcycle is expected to drive Penang’s economic growth through 2026.
OCBC senior Asean economist Lavanya Venkateswaran said the state’s electrical and electronics (E&E) sector remains resilient, though risks stemming from the West Asia conflict warrant close monitoring as it could weigh on transportation and logistics, potentially impacting the semiconductor supply chain.
“Penang’s gross domestic product (GDP) growth has consistently outperformed the national average since the pandemic.
“With the global semiconductor upcycle likely to sustain through 2026, we expect GDP growth in Penang to remain supported,” she told Bernama.
On the export front, she said Malaysia’s E&E market, primarily directed toward Asean, the United States, and China, is expected to continue driving growth, albeit with exports to the United States impacted by tariff policies.
While manufacturing remains the state’s economic bedrock, Lavanya highlighted that the services sector, including wholesale and retail trade, finance and insurance, continues to be a significant contributor to the national GDP, while the tourism sector could also pose as a burgeoning catalyst, supported by the Visit Malaysia 2026 programme.
“There is a concerted push from the authorities to move the semiconductor sector higher up the value chain while boosting intra-city connectivity and promoting tourism for holiday and medical purposes.
“These should help provide some counter-cyclical resilience to the state’s economic growth in the coming years,” she said.
