KUALA LUMPUR: Malaysia’s economic outlook remains resilient, supported by strong manufacturing activity, sustained infrastructure investment and a rapidly expanding data centre sector, said S&P Global Ratings.
Its senior economist for Asia Pacific, Vishrut Rana, said the country continues to record solid economic momentum, driven largely by its role in the regional technology supply chain.
"We continue to see relatively strong economic performance out of Malaysia, supported by robust manufacturing of technology and electronic products.
"The ongoing investments in the sector are expected to support growth over the medium term while enabling Malaysia to move up the value chain,” he said during S&P Global Ratings’s webinar today on Malaysia Credit Outlook: Geopolitics, Data Centres, And The Future Of Credit.
Vishrut said public investment in large-scale infrastructure projects, particularly rail and transport developments, is also contributing significantly to Malaysia’s economy.
He said rising investments in data centres have also emerged as a key and increasingly substantial driver of economic expansion in recent months.
Vishrut said Malaysia’s manufacturing sector outperformed overall economic growth in the second quarter, while strong mining output, especially from gas exports, further supported national income.
He said inflationary pressures are relatively contained, with headline consumer price inflation hovering around two per cent, within the central bank’s comfort range.
"We see some pockets of inflation, for example, in the personal care and performance segment, but broad-based inflationary pressures are largely not present.
"This was helped by existing subsidies for consumer energy products, which remain in place,” he said.
Looking ahead, Vishrut said Malaysia’s growth in 2026 is likely to exceed S&P Global Ratings’ earlier projection of 4.9 per cent, supported by stronger-than-expected performance in the first half of the year.
The economist expects inflation to remain stable, reducing the need for near-term monetary policy adjustments.
Vishrut added that the ringgit has remained relatively strong without significantly affecting export competitiveness, while labour market conditions are steady. - Bernama
