PETALING JAYA: Exports are expected to stay strong into 2026, helping to support overall economic growth despite rising global risks.
The latest trade data signal continued its momentum from late 2025, with net exports providing a firm underpinning to overall economic expansion alongside steady domestic demand. Analysts highlighted that the strength seen in the first quarter of 2026 (1Q26) reflects both cyclical recovery and structural drivers tied to global technology and commodity demand.
In its note, TA Research said: “The January to March trade data provided an encouraging performance, reinforcing the strong momentum observed at the tail-end of 4Q25.
“Net exports have remained supportive of growth, underpinned by a solid trade surplus,” it added.
TA Research maintains its 2026 full-year export growth forecast at 4.6% year-on-year (y-o-y), with imports projected to expand by 6.2% y-o-y, while the trade surplus is expected to remain healthy at around RM135bil.
The research house further said growth in external demand is expected to complement domestic resilience, adding 1Q26 gross domestic product (GDP) growth is expected to remain resilient above the 5% level.
However, it said “some caution is warranted” as the persistent softness in intermediate goods exports, which declined by 1.1% in the latest month, pointed to lingering weakness in upstream demand, adding that currency strength could also weigh on momentum.
Apex Securities is similarly optimistic on Malaysia’s trade outlook for 2026, citing sustained electrical and electronics (E&E) demand driven by artificial intelligence (AI) and semiconductor applications.
“We maintain our 2026 export growth forecast at 4.8% y-o-y (2025: 6.4% y-o-y),” it said.
“Exports should remain supported by sustained E&E demand, driven by the AI-led tech upcycle and rising semiconductor applications across electric vehicles or EVs and other industrial sectors,” the research house explained.
It also pointed to supportive commodity dynamics, noting Malaysia’s role as a net energy exporter and potential gains from stronger biofuel demand.
Nonetheless, it warned that external headwinds are rising, highlighting geopolitical tensions and evolving US trade policies.
Recent data showed Malaysia’s export growth rose 8.3% y-o-y in March, easing from the 10.7% growth in February but remaining resilient despite geopolitical tensions. Imports grew 10.4%, with trade surplus standing at RM24.6bil.
For 1Q26, exports expanded 12.7% while imports rose 7.7%, pushing the trade surplus to a three-year high of RM63.2bil and pointing to a stronger net export contribution to GDP growth.
CIMB Research takes a more measured view on growth, noting limited near-term trade impact from policy changes in the palm oil sector. It said the biodiesel mandate shift is “unlikely to meaningfully shift the trade balance in the near term”, given palm oil’s relatively small share of exports.
On domestic conditions, CIMB observed emerging softness, stating “consumption goods imports were notably weak, declining 7.8% with broad-based softness,” which may signal moderating household demand.
Overall, it said: “We maintain our 2026 GDP forecast of 4.3%, pending further data.”
Hong Leong Investment Bank Research highlighted logistical and geopolitical risks, particularly from Middle East tensions affecting shipping flows.
It said “deliveries are expected to face delays” despite Malaysia retaining transit access, and expects policy stability, maintaining that Bank Negara Malaysia will likely keep the overnight policy rate unchanged at 2.75%.
Meanwhile, one analyst said exports are still doing a lot of the heavy lifting for the country’s economy right now, especially with strong demand for electronics. But with global risks rising, one cannot assume the robust pace seen in 1Q26 will hold all year.
“Growth should stay solid, but there are early signs consumers may be starting to pull back a bit. If that continues, Malaysia will need both domestic demand and exports to stay balanced to keep the economy on track,” he said.
