Kuala lumpur: Government measures to safeguard fuel and supply chains could support production activities in the near term, said Apex Securities Bhd. In a research note, the brokerage firm highlighted existing inventory buffers, supplier diversification efforts, and initiatives to protect these critical areas to help cushion the impact of potential disruptions.
According to BERNAMA News Agency, Apex Securities has indicated that current supply disruption risks remain manageable, with no signs of broad-based disruptions across key sectors. The firm cites manufacturing purchasing managers index (PMI) surveys, which point to ongoing inventory accumulation. Bank Negara Malaysia (BNM) highlighted in its latest first-quarter 2026 Quarterly Bulletin that businesses are holding an average of three to four months of inventory.
Apex Securities noted that firms have been diversifying suppliers and export destinations, reducing reliance on any single supply source. The firm maintained its 2026 gross domestic product (GDP) growth forecast at 4.7 percent year-on-year, expecting that the West Asia conflict should gradually ease in the third quarter of 2026, aligning with BNM's baseline scenario.
Given the signs of near-term supply chain resilience, Apex Securities does not anticipate the current conflict to materially disrupt domestic production activities or derail the broader growth momentum. The firm also expects growth to be supported by resilient exports of electrical and electronic products and ICT-related services, alongside steady domestic demand.
Existing policy support measures, including the continuation of targeted RON95 and diesel subsidies, as well as income-related support programs like Sumbangan Asas Rahmah (SARA), Sumbangan Tunai Rahmah (STR), and Jualan Rahmah, are expected to underpin household spending. Following a stronger-than-expected first quarter GDP print in 2026, growth is likely to sustain in the coming quarters.
The recent increase in fuel prices has raised fiscal costs. According to the government, Malaysia's fuel subsidy bill peaked at RM7.5 billion in April before moderating to RM3.5 billion in May. Apex Securities estimates the additional fiscal burden could amount to RM18 billion, or 0.8 percent of GDP, if elevated energy prices persist. However, the firm does not foresee material risks to Malaysia's fiscal position, partly due to targeted fuel subsidy reforms implemented in recent years.
The government has reaffirmed its commitment to cost rationalisation across ministries. Apex Securities cautioned that higher subsidy costs could lead to expenditure reprioritisation under the 13th Malaysia Plan but expects minimal impact on the broader public investment pipeline. Overall, the firm expects Malaysia's sovereign credit profile to remain intact.