PETALING JAYA: Malaysia’s export growth is expected to remain resilient in the second half of 2026 (2H26), supported by sustained demand for electrical and electronics (E&E) products and a continuing semiconductor upcycle.
Commodity shipments are also likely to provide additional support, although protectionist measures, geopolitical tensions and increasingly challenging base effects could temper the pace of growth.
CGSI Research said it remained positive on Malaysia’s 2H26 export outlook, citing resilient manufacturing activity in China, while cautioning that protectionist measures remained a key risk.
“Export trends in July 2026 suggest the trade sector could remain resilient in 2H26,” it said.
“While E&E exports should remain the main driver of overall trade performance, we think commodity-related exports could also provide additional support in the coming months,” it added.
CGSI Research said petroleum-related exports had benefited from firm energy prices and sustained demand from regional markets, with resilient manufacturing activity in China expected to support demand for industrial and energy-related products.
It also expects palm oil exports to strengthen, with the Malaysian Palm Oil Council expecting crude palm oil prices to remain above RM4,600 per tonne in September 2026 amid tightening supply, geopolitical uncertainties and firm biofuel demand.
However, CGSI Research cautioned: “Any moderation in global growth could weigh on external demand and commodity consumption, while lower crude oil prices may impact the petroleum-related exports.
“We are also mindful of stronger protectionist measures among major economies, which could affect global trade flows and business confidence,” it noted.
Hong Leong Investment Bank (HLIB) Research, likewise, expects exports to support economic growth through the year, underpinned by robust demand for E&E goods. However, it flagged geopolitical tensions, tariff risks and the concentration of integrated circuit exports as key vulnerabilities.
HLIB Research maintained its 2026 gross domestic product growth forecast at 5.3%.
TA Research is also cautiously positive on the trade outlook, although it expects export and import growth to moderate as increasingly unfavourable base effects kick in during the remainder of the year.
“Trade values should nevertheless remain elevated, supported by resilient external demand and the ongoing E&E and semiconductor upcycle,” it said.
The research house added that diversification of export markets and products, alongside greater use of existing trade agreements and deeper penetration of high-potential markets, would be important to sustaining trade growth.
Malaysia’s export growth remained robust at 38% year-on-year in July, driven by strong E&E shipments, while imports rose 36.4%.
The trade surplus widened to RM22.5bil, bringing the cumulative surplus for the first seven months of 2026 to RM170.5bil, sharply above RM71.4bil in the corresponding period last year.
Meanwhile, one analyst told StarBiz that Malaysia’s export momentum should remain intact in the months ahead, with technology-related demand providing a key anchor even as the broader trade environment becomes more challenging.
“While growth rates may ease as the year progresses, resilient regional demand and ongoing investment in the semiconductor ecosystem should continue to underpin Malaysia’s external trade performance,” he explained.
