Kuala lumpur: Expectations for Malaysia's economy to grow by more than five per cent in 2026 are not overly optimistic, given its strong first-half performance, resilient global trade, and rising foreign direct investment (FDI), particularly in data centres, semiconductors, and artificial intelligence (AI). Williams Business Consultancy Sdn Bhd economist Dr Geoffrey Williams stated that Malaysia's normal economic growth rate lies between 4.5 and 5 per cent in the absence of major disruptions.
According to BERNAMA News Agency, Dr Williams emphasized the significant increase in trade and FDI in sectors such as data centres, semiconductors, and AI, which are driving economic growth higher. "We are seeing global trade holding up. Global growth is higher than people had expected at the beginning of the year," he mentioned during the Logisym Malaysia 2026 symposium, focusing on digitalisation.
Dr Williams highlighted that Malaysia's robust economic performance in the first half of the year has laid a strong foundation for full-year growth, largely supported by government policies stabilizing petrol and diesel prices despite rising global oil prices. He noted that this stability has alleviated concerns among consumers and businesses about the impact of higher oil prices globally, contributing to strong growth in the first half.
Dr Williams expressed confidence that Malaysia would likely reach the upper end of the government's four to five per cent growth forecast, even with normal economic growth rates in the second half. "I believe it will be a little bit higher than five per cent, which will be good, because there is nothing in particular that will slow down the economy in the second half," he added.
Bank Negara Malaysia (BNM) recently stated that there is no need to revise Malaysia's 2026 gross domestic product (GDP) growth forecast and remains optimistic that growth will likely settle around five per cent. BNM Governor Datuk Seri Abdul Rasheed Ghaffour mentioned that any revisions would typically occur during the Budget 2027 announcement.
Dr Williams also pointed out that global conditions continue to bolster Malaysia's growth outlook, with global trade remaining resilient despite geopolitical uncertainties. He noted an increase in projections for annual global trade growth in 2026 to 3.5 per cent from 2.8 per cent previously, with expectations for next year rising to 4.3 per cent from an earlier forecast of 3.8 per cent.
Dr Williams concluded by stating that businesses and global supply chains have become more agile in managing repeated shocks, while robust technology-related activities are helping to counterbalance weaknesses in more traditional economic activities.