Kuala lumpur: Malaysia's second quarter (2Q 2026) gross domestic product (GDP) growth is anticipated to moderate to a range of 4.8-5.0 per cent from the 5.4 per cent recorded in the first quarter of 2026, as per insights from an economist.
According to BERNAMA News Agency, Mohd Sedek Jantan, director of investment strategy and country economist at IPP Financial Advisers (IPPFA), noted that Malaysia's domestic economy maintains its resilience amidst rising geopolitical tensions in West Asia and fluctuating global energy prices.
Mohd Sedek highlighted that stronger domestic demand, resilient external trade, and a supportive policy environment are counterbalancing external challenges, enabling economic activities to sustain a solid growth trajectory. Despite some weakening in manufacturing during the quarter, business conditions progressively improved. The manufacturing purchasing managers index (PMI) rose from 49.9 in May to 50.5 in June, indicating a return to expansion. This improvement suggests that manufacturers have effectively navigated supply chain disruptions and external uncertainties while benefiting from the global artificial intelligence-driven technology upcycle and continued demand for electrical and electronic exports.
Domestic demand continues to be the primary growth driver, with wholesale and retail trade figures reaching RM174 billion in April and RM171 billion in May, among the strongest since 2024. This resilience reflects strong household consumption despite elevated living costs.
Macroeconomic fundamentals remained supportive throughout the quarter, with inflation well-contained despite rising global crude oil prices. This was largely due to the government's decision to maintain the RON95 petrol subsidy at RM1.99 per litre, reducing the impact on transportation and consumer prices. Furthermore, Bank Negara Malaysia's stable overnight policy rate supported credit growth, business investment, and household spending without causing excessive inflationary pressures.
Mohd Sedek remarked that Malaysia's economy is increasingly bolstered by stronger internal demand and policy stability. The combination of resilient consumption, improving investment sentiment, robust exports, and controlled inflation indicates that growth is broad-based rather than confined to a single sector. He expressed confidence in Malaysia's economic momentum for 2Q 2026 and reaffirmed the forecast of achieving a full-year GDP growth rate of 4.6 per cent for 2026. Nonetheless, he cautioned that geopolitical developments and global trade conditions will require ongoing attention.
Advance estimates for Malaysia's 2Q 2026 GDP are set to be released by the Department of Statistics Malaysia (DOSM) this Friday (July 17).