Kuala lumpur: IPP Financial Advisers (IPPFA) has maintained its 2026 Malaysia gross domestic product (GDP) growth forecast at 4.6 per cent despite global uncertainty, supported by resilient domestic demand, private investment, and a gradual recovery in external trade. IPPFA director of investment strategy and country economist, Mohd Sedek Jantan, emphasized Malaysia's strategic advantage amid global supply chain reconfigurations, citing the nation's robust semiconductor ecosystem and favorable investment climate.
According to BERNAMA News Agency, Malaysia is poised to capture high-value manufacturing and technology investments due to expanding data center investments and growing AI infrastructure. Mohd Sedek Jantan noted the diversification of Malaysia's growth drivers, highlighting the roles of domestic consumption, semiconductor expansion, AI-related investments, and digital infrastructure in sustaining economic momentum.
IPPFA projects exports to reach approximately RM1.8 trillion in 2026, bolstered by demand for electrical and electronics products and a recovery in global manufacturing. Imports are expected to be around RM1.6 trillion, driven by robust domestic investments and continued capital expenditure. Total trade is anticipated to expand by approximately 11 per cent, with a trade surplus recovering towards RM200 billion, reinforcing Malaysia's strong external position.
Mohd Sedek underscored Malaysia's evolving competitive landscape, which now attracts investments due to its skilled workforce, strategic location, and growing role in advanced manufacturing and AI supply chains. Inflationary pressures are expected to remain contained, with a forecasted average headline inflation of 2.0 per cent in 2026. The unemployment rate is projected to improve to 2.8 per cent, reflecting expansion in employment opportunities across various sectors.
Regarding the ringgit, IPPFA maintains a positive medium-term outlook, supported by improving macroeconomic fundamentals and resilient foreign investment inflows. However, challenges persist in maintaining levels below RM4.00 against the US dollar due to the US Federal Reserve's monetary policy stance and geopolitical uncertainties.
In the domestic equity market, IPPFA anticipates the FBM KLCI to end 2026 at around 1,780 points, driven by improving corporate earnings and sustained foreign direct investment. Mohd Sedek highlighted four strategic investment themes: "Higher-for-Longer Supports USD", "Strategic Emerging Markets", "AI as a Strategic National Priority" and "Resource Security", which are expected to shape financial markets in the latter half of 2026 and beyond.
Looking forward, Mohd Sedek stated that AI, strategic manufacturing, supply-chain diversification, and resource security will be key drivers of global capital allocation over the next decade, with governments directing capital to strategically important industries in an increasingly fragmented global economy.