PETALING JAYA: Malaysia’s first quarter of 2026 (1Q26) economic growth is expected to come broadly in line with earlier estimates, with economists pointing to resilient domestic demand even as external risks remain elevated ahead of the official release today.
Hong Leong Investment Bank (HLIB) Research expects 1Q26 gross domestic product (GDP) growth to come in at 5.4%, slightly above the Statistics Department’s advance estimate and consensus median forecast of 5.3%.
“Growth is expected to be anchored by sustained, albeit cooling, expansion across most sectors – services, manufacturing, agriculture and construction,” the research house noted in a GDP preview report.
On the demand side, HLIB Research said domestic demand is anticipated to be the primary growth engine, alongside a positive net export contribution propelled by stronger export growth.
Still, with ongoing uncertainties, the research house kept its GDP growth forecast for 2026 unchanged at 4.5% at this juncture, within Bank Negara Malaysia’s target range of 4% to 5%.
“While risks from potential global energy supply disruptions persist, we remain cautiously constructive on Malaysia’s economic resilience, underpinned by its status as a net exporter of oil and gas, trade relationships with other major oil producers, exposure to the ongoing global tech upcycle and supportive fiscal measures.”
The World Bank yesterday projected Malaysia’s economy to grow at 4.4% this year, with domestic demand continuing to anchor activity.
However, World Bank division director for Brunei, Malaysia and the Philippines Zafer Mustafaoglu said the near-term outlook is subject to considerable uncertainty.
“Risks are tilted to the downside. Geopolitical conflict and trade tensions, weaker global growth, financial market volatility, and policy uncertainty in major economies could all weigh on trade and confidence,” he said during his welcoming speech at the launch of the 32nd Malaysia Economic Monitor publication.
“As a highly open economy, Malaysia remains exposed – especially through trade and financial channels.”
He added that while Malaysia enters the period from a position of strength, the external headwinds reinforce the need for continued resilience-building.
“These headwinds are also a call to act – decisively. It is a reminder to keep strengthening resilience. Accelerate fiscal reforms to rebuild buffers. Ensure targeted support reaches Malaysians who need it most – especially where spatial disparities persist. And even amid immediate pressures, stay focused on the foundations for long term growth.”
Meanwhile, Economy Minister Akmal Nasrullah Mohd Nasir said 1Q26 economic growth is expected to meet the advance estimate of 5.3%, if not better.
“Although I am personally inclined to tone things down in the context of the current crisis, I expect the 1Q26 growth will not differ much from our projection and may even be better than the previous estimate,” he told Bernama.
He said the economy is forecast to grow between 4% and 5% in 2026, with inflation to remain “manageable” at 1.5% to 2.5%.
