KUALA LUMPUR, Oct 1 — MBSB Investment Bank Bhd (MBSB IB) has projected Malaysia’s gross domestic product growth at 5.1 per cent in 2026, taking into account the robust growth recorded in the first half of the year.
The country continues to benefit from rising global demand for technology and electrical and electronic (E&E) products.
“The continued rise in domestic demand would continue to anchor Malaysia’s sustainable economic growth.
“Nevertheless, the growth outlook remains exposed to downside risks from elevated input and energy costs, renewed global inflationary pressures, tighter trade policies, prolonged supply disruptions, and potentially weaker final demand,” it said in a note today.
Malaysia’s growth momentum remained supportive in the near term, with the Leading Index increasing by 1.1 per cent year-on-year (y-o-y) in July 2026, down from 1.3 per cent in June, underpinned by stronger imports of semiconductors and precious metals.
“Despite the slight moderation in the LI, Malaysia’s economy is expected to continue expanding in the second half of 2026,” MBSB IB said.
It added that Malaysia’s total trade growth accelerated to 43.4 per cent y-o-y in August 2026 from 37.2 per cent in July, extending the double-digit expansion for the 12th consecutive month.
“Export growth accelerated to 45.5 per cent y-o-y from 38.0 per cent in July, while imports rose by 41.1 per cent y-o-y from 36.3 per cent previously.
“E&E products remained the key export driver, contributing to 62 per cent of total export growth, while imports continued to be supported by higher purchases of intermediate and capital goods,” MBSB IB said.
On the ringgit, it expects the local currency to average around RM4.01 against the United States (US) dollar in 2026 and potentially move towards RM4.03 by year-end.
“However, we expect a weaker bias for now as the latest hawkish expectations surrounding the US Federal Reserve could delay the potential reversal of funds back into emerging-market currencies, including the ringgit,” MBSB IB said.
