PETALING JAYA: Kenanga Research expects Malaysia’s current account to stay firmly in surplus as it retains the forecast for 2026 at 2.1% of gross domestic product (GDP).
This will be higher than 2025’s 1.6%.
According to Kenanga Research, the country’s external position should hold up well despite ongoing geopolitical noise from the West Asia conflict.
Costlier energy and a softer global demand could crimp parts of world trade, but Malaysia’s exposure is cushioned by the electrical and electronics (E&E) and artificial intelligence upcycle, particularly semiconductors, servers and data-centre infrastructure.
“The second-quarter 2026 (2Q26) GDP print supports this view, with growth stepping up to 6% (1Q26: 5.4%), while a rebound in liquefied natural gas and non-E&E shipments adds further breadth.
“Hyperscaler capital expenditure and inventory normalisation across advanced economies should keep export demand supported through 2026, while tourism and digital-infrastructure spending should lift services exports.
“A firmer ringgit could nudge imports higher and energy costs remain a swing factor, but we expect the external balance to stay comfortably in surplus,” added Kenanga Research.
In 2Q26, Malaysia’s current account surplus narrowed to RM10.8bil, or 2% of GDP, down from RM15.2bil or 3% of GDP in 1Q26.
The primary income deficit hit a record high of RM27.2bil in 2Q26, widening from RM20.9bil in 1Q26, as profit repatriations by foreign multinationals jumped sharply to RM51.8bil from RM38.6bil.
Although Malaysian companies abroad earned higher profits of RM24.6bil (up from RM17.8bil in 1Q26), the scale of foreign profit outflows widened the primary income deficit to a record level, serving as the main drag on the overall current account. Kenanga Research further noted that the services account flipped from a healthy RM6.4bil surplus in 1Q26 to a RM700mil deficit in 2Q26.
This reversal was driven by a sharp rise in payments for imported professional and business services, which widened to RM8bil from RM1.9bil in 1Q26, alongside higher insurance and pension deficits of RM3.6bil (1Q26: RM2.7bil).
Meanwhile, tourist spending reflected in the travel surplus moderated slightly to RM13.2bil.
“However, physical trade provided the primary cushion, with the goods surplus expanding from RM33.6bil in 1Q26 to RM40.7bil in 2Q26.”
Meanwhile, the secondary income deficit narrowed to a five-quarter low of RM2.1bil (1Q26: RM4bil), supported by higher inward worker remittances of RM11.7bil and lower outward remittances of RM13.8bil.
