Kuala lumpur: Investment banks and research firms have adjusted their forecasts for Malaysia's 2026 gross domestic product (GDP) growth, projecting it to be between 4.5 per cent and 4.7 per cent. This is attributed to stronger domestic demand, export growth, and continued investment realisation.
According to BERNAMA News Agency, Kenanga Investment Bank Bhd has maintained its 2026 GDP growth forecast at 4.5 per cent, suggesting potential growth up to 5.0 per cent if current trends continue. This projection is based on robust domestic demand, supported by stable labour market conditions, increasing household incomes, and ongoing targeted aid. The services sector, particularly tourism, is expected to contribute significantly to growth as Malaysia increases capacity for Visit Malaysia 2026. Investment initiatives are also likely to remain robust, driven by key national frameworks including the New Industrial Master Plan 2030, National Energy Transition Roadmap, National Semiconductor Strategy, AI Nation Framework, and the 13th Malaysia Plan.
Meanwhile, Apex Securities Bhd has revised its 2026 GDP forecast upwards to 4.7 per cent year-on-year from a previous 4.3 per cent, crediting strengthened GDP growth momentum in the fourth quarter of 2025. The firm notes that increased tourist arrivals during Visit Malaysia 2026, along with policy support for low-income households, should bolster private consumption. Additionally, investments in expanding data centres are expected to lead to positive outcomes for higher value-added activities, including information and communication technology services.
Hong Leong Investment Bank Bhd has also raised its 2026 GDP forecast to 4.7 per cent, expecting domestic demand to remain the main driver of growth, supported by a healthy employment market, favorable policy measures, and sustained investment activities. The bank mentions potential upside factors such as a decrease in global policy uncertainty and unexpectedly strong demand for electrical and electronics goods. However, it also warns of downside risks from increasing protectionism and weaker external demand.
Regarding monetary policy, the firm and other investment banks predict that Bank Negara Malaysia will maintain the Overnight Policy Rate at 2.75 per cent throughout 2026.