Malaysia's current account surplus to remain firm at 2.1pct of GDP in 2026 – Kenanga IB

KUALA LUMPUR: Kenanga Investment Bank (Kenanga IB) predicts Malaysia's 2026 current account will remain in surplus, projecting a figure of 2.1 percent of gross domestic product (GDP), up from 1.6 percent in 2025. Despite geopolitical tensions in the Middle East and potential challenges to global trade from rising energy costs and softer demand, Malaysia's position is bolstered by growth in the electrical and electronics (E&E) sector, artificial intelligence (AI) technology, particularly semiconductors, servers, and data-center infrastructure.

The second quarter of 2026 (Q2 2026) GDP growth of 6.0 percent, up from 5.4 percent in Q1 2026, supports this outlook, alongside a rebound in liquefied natural gas (LNG) and non-E&E shipments. The investment bank also anticipates continued demand for Malaysia's exports, driven by hyperscaler capital expenditure, inventory normalization, and increased tourism and digital infrastructure spending in advanced economies.

While a stronger ringgit may lead to higher imports, energy costs remain a variable. Kenanga IB remains confident that the external balance will stay comfortably in surplus, despite potential import pressures from energy costs. Recent figures show Malaysia's current account surplus of RM10.8 billion in Q2 2026, driven by a significant increase in goods exports to RM40.7 billion, as announced by the Department of Statistics Malaysia (DOSM).

Meanwhile, Bank Negara Malaysia reported the economy expanded by 6.0 percent in Q2 2026, exceeding the DOSM's earlier estimate of 5.8 percent, fueled by strong domestic demand and robust export performance.