Kuala lumpur: Malaysia’s economic growth continues to remain resilient this year, against the backdrop of external volatility and uncertainties related to United States trade policy, according to S and P Global Ratings (S and P).
According to BERNAMA News Agency, Vishrut Rana, S and P’s senior economist for Asia Pacific, highlighted that key factors behind Malaysia’s resilience include support from the external sector, notably the strong performance of the global technology industry. This growth is driven by robust demand for artificial intelligence and increased investment in data centers.
Rana emphasized that economies in the Asia Pacific region, which are integral parts of the technology supply chain, have benefited significantly. Malaysia, being a crucial part of the electronic supply chain in the region, has experienced positive economic performance as a result.
The Malaysian economy’s high external orientation is underscored by 35 percent of its value-added arising from external demand. Rana noted that maintaining steady external conditions will be crucial for Malaysia’s economic outlook this year.
Bank Negara Malaysia (BNM) is expected to be cautious with monetary policy easing due to rising inflation in specific sectors, such as personal care, restaurants, and financial services. Rana suggested that if inflation trends higher, particularly in food prices, a shift towards tighter monetary policy settings could occur, though any changes are expected to be marginal.
Rana also commented on the containment of core inflation, indicating that while overall inflation pressures are limited, certain sub-components may experience higher inflation in the coming months, which could exert pressure on prices.
Additionally, Rana praised the initiatives outlined in Budget 2026, noting their supportive nature and focus on industrial policy, moving up the value chain, and delivering gains for small and medium enterprises in alignment with the New Industrial Master Plan 2030. He remarked on Malaysia’s strategy to leverage its existing position in the tech space, with a manufacturing-led approach emphasizing new technologies.