Kuala lumpur: Malaysia's economy is projected to grow at a rate of 4.7 per cent in 2026, benefiting from data centre activity and the upturn in the global technology cycle, according to the International Monetary Fund (IMF).

According to BERNAMA News Agency, the IMF stated that in emerging market and developing economies, growth is projected to slow to 3.8 per cent in 2026 before recovering to 4.5 per cent in 2027. The IMF's World Economic Outlook (WEO) Update for July 2026, titled "Global Economy in Crosscurrents of War and Technology," highlighted the heterogeneous revisions that reflect differences in commodity dependence, geographic exposure, remittances and tourism receipts, sensitivity to financial conditions, and position in the global technology value chain.

The IMF reported that global growth is projected to be 3.0 per cent in 2026 and 3.4 per cent in 2027, down from the average of 3.5 per cent observed in 2024-2025. This projection is broadly unchanged on a cumulative basis compared with the forecast in the April 2026 WEO. The modest slowdown is attributed to the effects of the war in West Asia being partly offset by accelerated demand-driven momentum in the global technology cycle, thanks to advances in artificial intelligence (AI) and its adoption.

The impact of these economic conditions varies widely based on countries' exposure to the war and their position in the technology value chain. Energy exporters outside the conflict zone benefit from favourable terms of trade, whereas economies integrated into the technology-led upturn experience stronger activity, even if they are energy importers. Conversely, activity weakens for energy importers with limited participation in the technology value chain, a group that includes many low-income countries, as noted by the IMF.