PETALING JAYA: Malaysia’s 2026 export outlook remains firm, but growth is likely to moderate in the second half as favourable base effects fade.
“Upside revision, but downside risks mounting,” Kenanga Research said, citing sustained demand for electrical and electronics (E&E) products, particularly on the back of artificial intelligence-related technology investment and new product launches.
The research house raised its 2026 export growth forecast sharply to 28.5% from 19%, as robust semiconductor demand and US shipments continue to drive external trade, expecting exports to exceed RM2 trillion this year.
August exports are re-accelerating 45.5% year-on-year (y-o-y), from 38% in July, beating both the consensus forecast of 38% and Kenanga Research’s own estimate of 44.4%.
Year-to-date export growth stood at 31.2%, up from 29.2% in January to July, pointing to continued strength in external demand through the third quarter.
E&E exports, the key growth engine, surged 66.5% in August from 51% in July, reaching a four-month high.
Kenanga noted that E&E exports accounted for 48.4% of total exports, although this was slightly lower than 49.4% previously.
US demand was another major driver, with shipments to the United States jumping 139.1% y-o-y, followed by strong growth to Singapore, Taiwan, Hong Kong and Japan.
Meanwhile, exports to China and the European Union continued to expand, although at a slower pace.
Hong Leong Investment Bank (HLIB) Research also maintained a constructive outlook, saying the global semiconductor upcycle remained the primary engine of Malaysia’s export performance.
“The sustained tailwind from the global semiconductor upcycle remains the primary growth engine for Malaysia’s export performance, with semiconductor-related exports soaring,” it said.
Furthermore, HLIB Research highlighted August’s manufactured exports rose 53.4%, led by E&E products, which grew 66.5%.
Integrated circuit exports jumped 97%, while solid-state storage devices surged 468.8%.
Global chip sales, meanwhile, climbed 135.1% in August.
Commodity exports were more mixed.
Liquefied natural gas exports jumped 51.8%, supported by higher volumes and prices, while crude petroleum exports contracted 19.3%.
Palm oil exports fell 25%.
Imports also remained strong, rising 41.1% y-o-y, driven by a 50.5% increase in intermediate goods and 37.4% growth in capital goods.
Kenanga Research viewed the strength in intermediate goods as a sign of robust production momentum, while capital goods imports pointed to continued investment activity.
The stronger trade performance lifted Malaysia’s trade surplus to RM28.1bil in August from RM22.5bill in July.
However, analysts flagged risks ahead.
HLIB Research identified the pending US announcement on excess-capacity tariffs as a key downside risk, while Kenanga cited renewed uncertainty over US trade policy, weaker global growth, higher energy prices, geopolitical tensions, a potential post-AI or artificial intelligence electronics demand cliff and commodity volatility.
Despite these risks, HLIB Research kept its 2026 gross domestic product growth forecast at 5.3%, saying strong trade should continue to support the domestic economy.
