Kuala lumpur: CIMB Treasury and Markets Research has revised its 2026 gross domestic product (GDP) forecast upward to 4.4 per cent from 4.1 per cent previously, supported by continued growth momentum in the services and construction sectors but balanced by moderation in manufacturing. According to BERNAMA News Agency, the advanced estimate for the fourth quarter growth in 2025 has surprised again, showing a year-on-year (y-o-y) increase of 5.7 per cent, leading to an overall growth of 4.9 per cent for the full year. CIMB Treasury and Markets Research noted that the strong momentum in the services sector is expected to continue into 2026, driven by the second round of civil servants' salary hike, the February 2026 disbursement of Sumbangan Asas Rahmah (SARA) aid for all, and the Visit Malaysia Year. However, this is likely to be tempered by a slowdown in the manufacturing sector as demand for exports, particularly in non-electric and electronics, weakens, resulting in an average GDP growth of 4.4 per cent in 2026. CIMB Treasury and Markets Research also highlighted that compared to its GDP preview earlier this week, services posted a positive surprise with a 5.4 per cent y-o-y growth, while the Department of Statistics Malaysia (DOSM) reported strong performance in the wholesale and retail trade, transportation and storage, as well as food and beverages and accommodation subsectors. Construction recorded an 11.9 per cent y-o-y growth, marking the eighth consecutive quarter of double-digit growth, supported by non-residential buildings and specialized construction activities. Considering the revised outlook, CIMB Treasury and Markets Research said it no longer calls for a 25 basis point rate cut to the overnight policy rate (OPR) and instead expects Bank Negara Malaysia to keep the OPR unchanged in the upcoming January meeting, throughout the rest of 2026. On inflation, it is likely to average around 1.5 per cent y-o-y in 2026 with no clear signs of upward pressure as energy and input costs remain low. Nonethe less, CIMB Treasury and Markets Research remains vigilant for any signs of hawkish language in next week's Monetary Policy Committee statement.