PETALING JAYA: Malaysia’s exports are expected to moderate through the rest of 2026, after a robust expansion in the first half of the year (1H26).
This is mainly attributable to temporary factors that boosted shipments earlier in the year, including inventory restocking, stockpiling and front-loaded orders, with analysts expecting growth to ease as these effects unwind, despite continued strength in the electrical and electronics (E&E) sector.
Analysts said robust demand for E&E products, particularly semiconductors linked to artificial intelligence (AI), together with resilient energy exports, should continue to support external trade despite rising geopolitical and trade policy risks.
TA Research said that despite Malaysia’s external trade resilience, growth is expected to come in slower in 2H26.
“While demand for Malaysian exports has remained resilient, supported by the E&E upcycle and sustained global demand, several headwinds could weigh on external performance, including a stronger ringgit and ongoing geopolitical uncertainties,” the research house explained.
“In addition, part of the recent strength may have been driven by front-loading activities ahead of potential trade and policy developments,” it highlighted.
Moreover, TA Research noted that despite persistent tariff uncertainty, Malaysia’s diversified export base, supply chain relocation and trade diversification trends should help the external sector remain resilient and continue supporting economic growth.
Kenanga Research also expected slower export growth for 2H26, but remained optimistic on the full-year outlook, raising its 2026 export growth forecast to 19% from 9.7% previously, post the robust 1H26 data.
“Exports remained robust, supported by continued inventory restocking and sustained E&E demand driven by AI-related technology.
“However, we expect growth to slow in 2H26 as these temporary effects unwind, base effects turn less favourable, and global trade flows normalise,” it added.
Kenanga Research maintained its 2026 gross domestic product (GDP) growth forecast at 4.5% to 5%, with a bias towards the upper end of the range should export momentum remain resilient.
According to BIMB Research, Malaysia’s exports are expected to grow 15.8% this year.
“While some moderation is still likely in 2H26 as front-loading effects gradually ease, export prospects remain well supported by continued AI-driven demand for semiconductors, the US tariff exemption on semiconductors, and stronger energy exports, particularly liquefied natural gas (LNG) and crude petroleum, amid efforts to refill fuel shortages and replenish inventories globally,” it said.
Similarly, Hong Leong Investment Bank (HLIB) Research said Malaysia’s exports continued to benefit from strong global demand for E&E products alongside resilient oil and gas commodity exports, supported by elevated semiconductor and energy prices.
HLIB Research added that underlying momentum remained constructive, pointing to stronger domestic exports and manufacturing industrial production, while maintaining its 2026 GDP forecast of 4.7% pending the official second-quarter data.
Apex Securities Research maintained its 2026 export growth forecast at 16.3% after last month’s upward revision and recently lifted its GDP forecast to 5%, citing a stronger trade outlook.
The research house remained upbeat on the E&E sector as the Semiconductor Industry Association projects global semiconductor sales to grow 90% in 2026.
However, it expects export growth to moderate as stockpiling and favourable base effects unwind, while uncertainty over US trade policy and Middle East tensions remain key downside risks.
Latest trade data showed Malaysia’s exports rose 45.4% year-on-year (y-o-y) in June, while imports surged 43.9%, narrowing the trade surplus to RM14.9bil. For 1H26, exports increased 27.5%, imports grew 16.9%, and the cumulative trade surplus jumped 159.8% y-o-y to RM147.1bil.
Meanwhile, one analyst said Malaysia’s export momentum is likely to remain healthy.
“Nevertheless, external uncertainties warrant a cautious outlook for 2H26,” he pointed out, adding that he expects Malaysia’s trade growth pace to moderate in the coming months.
