PETALING JAYA: There is a likelihood that first-quarter 2026 (1Q26) economic growth could exceed the advance estimate released on April 17, says TA Research.
The brokerage said 1Q26 economic growth could potentially reach 5.7% year-on-year (y-o-y), compared to the advance gross domestic product (GDP) estimate of 5.3% released by the Statistics Department last month.
The official 1Q26 GDP data will be released on May 15.
Most quarterly macroeconomic indicators have already been released, except for construction data, providing an early indication of the economy’s 1Q26 performance.
TA Research said overall growth remained resilient in 1Q26, albeit moderating from 4Q25’s 6.3%, as the slower pace reflects a normalisation trend given that the first quarter typically experiences a sequential slowdown.
It added that there were no major downside risks from either domestic or external fronts during 1Q26, despite some adjustment in key services sector segments.
It noted that the Distributive Trade Index, a proxy for personal consumption expenditure, contracted 1.2% on a sequential basis but increased 4.9% y-o-y in 1Q26.
The research house highlighted that the services sector could record stronger growth of 5.7%, compared with the advance estimate of 5.4% y-o-y, as the Volume Index of Services – which has strong correlation with overall services GDP – exceeded expectations with a 5.8% expansion.
“Moreover, based on current crude palm oil output trends, the agriculture sector could also outperform the Statistics Department’s advance estimate of 2.4% y-o-y in 1Q26, provided that other sub-sectors such as rubber do not experience significant contraction,” it added.
TA Research maintained its GDP forecast at 4.3% to 4.7% for 2026, but said any revision would be reassessed following the release of the final 1Q26 GDP figures this Friday.
The government projects GDP to expand by 4% to 4.5% this year.
The brokerage said the economy continues to be supported by resilient domestic demand, particularly private consumption, tourism-related activities under the Visit Malaysia initiatives, steady income and employment growth, as well as sustained external trade performance.
“Nevertheless, trajectory-wise, we foresee growth moderating in the coming quarters following the stronger-than-expected performance in early 2026, amid normalisation in domestic activity, base effects, and lingering uncertainties surrounding global trade and geopolitical developments.
“Despite this, Malaysia’s growth outlook remains relatively supported by stable labour market conditions, ongoing investment activities, and continued policy support,” it added.
