Investment banks maintain positive 2026 GDP growth forecasts of 4.8-5.4 pct

Malaysia's investment banks are maintaining optimistic forecasts for the country's GDP growth in 2026, projecting a range of 4.8 to 5.4 percent. RHB Investment Bank has held steady at a 5.4 percent growth projection for 2026, backed by robust domestic demand and steady growth in electrical and electronics (E&E) exports. RHB IB noted that the stronger-than-expected 6.0 percent growth in the second quarter of 2026 further strengthens their positive outlook.

While they remain cautious about external risks, such as geopolitical uncertainties and tariff policies, Malaysia's diversified economy, integration into global supply chains, and efforts to diversify export markets bolster their confidence. MBSB Investment Bank revised its 2026 GDP growth projection to 5.1 percent, up from its previous estimate of 4.5 percent, driven by the impressive growth in the first half of 2026.

They attribute this growth mainly to an increase in external trade, driven by strong demand for E&E products and petroleum products. CIMB Investment Bank kept its 2026 GDP growth forecast at 4.8 percent, with net exports and a rebound in the mining sector fueling this growth. They attributed this growth to base effects from the previous year and a moderate outlook for the second half of 2026, as high base effects and the ongoing conflict in West Asia weigh on domestic sentiment and activity.

In terms of monetary policy, RHB IB and CIMB IB have maintained their stance that the Overnight Policy Rate (OPR) should remain at 2.75 percent, with decisions on monetary policy being data dependent, depending on economic growth prospects and inflation momentum.