Malaysia records 6% GDP growth in Q2 2026

Malaysia's economy expanded by 6% in the second quarter of 2026, according to Bank Negara Malaysia (BNM). This robust growth was fueled by strong domestic demand and a thriving export sector, with key drivers being the electrical and electronics (E&E) and services industries, as well as an upswing in exports of liquefied natural gas and other manufacturing products.

Household spending increased due to consistent income growth and government support. Similarly, investments surged as businesses continued to invest in structures, machinery, and equipment.

The economy's stability is set to persist in 2026, with growth anticipated to stay within the 4% to 5% range, according to BNM. The central bank expects the ringgit to maintain its stability against major trading partners' currencies, supported by solid domestic fundamentals and steady growth. Despite a slight rise in headline inflation to 1.9% from 1.6% in the first quarter, core inflation moderated to 1.9%, thanks to controlled external cost pressures from the ongoing Middle East conflict, notably impacting fuel prices.

BNM highlighted that financing options remain abundant to spur economic activity and aid SMEs grappling with financial difficulties. Repayment assistance, financing restructuring, and advisory services are accessible through the Credit Counselling and Debt Management Agency's small debt resolution scheme. Additionally, SMEs facing disruptions from the Middle East conflict can benefit from the SME Stabilisation Relief Facility and the RM10 billion BNM-CGC Guarantee Scheme, designed to enhance resilience and competitiveness in the future.

Inflation for the year is projected to average between 1.5% and 2.5%, with potential consumer price increases, though the central bank believes these impacts will remain contained.