Business : ADB Raises Malaysia's Economic Growth Forecasts For 2026 And 2027
KUALA LUMPUR, Sept 23 (Bernama) -- The Asian Development Bank (ADB) has raised its 2026 and 2027 economic growth forecasts for Malaysia to 4.9 per cent and 4.7 per cent, respectively.
The Asian Development Bank (ADB) has increased Malaysia's 2026 and 2027 economic growth projections to 4.9 percent and 4.7 percent, respectively. This upward revision is primarily driven by the semiconductor upcycle and the expansion of data center investments, which are bolstering consumption and construction sectors. The ADB's latest forecasts surpass the 4.6 percent and 4.5 percent growth estimates previously outlined in the Asian Development Outlook (ADO) report from July 2026.
However, the ADB anticipates a slight deceleration in Malaysia's growth during the second half of 2026 and in 2027. This anticipated slowdown is attributed to geopolitical tensions, such as the conflict in West Asia, which have disrupted supply chains and raised global prices, potentially straining household consumption and business operations.
The uncertain external environment is expected to persistently impact growth in the coming year. Despite these challenges, Malaysia's inflation is projected to remain stable at 2.0 percent through the end of 2026 and into 2027. Nonetheless, elevated inflationary pressures could negatively influence labor and consumption growth. The country's robust domestic spending, coupled with the potential benefits of tourism initiatives, including Visit Malaysia 2026 and the upcoming Formula One event in Sepang, is expected to bolster labor market prospects.
Furthermore, fuel subsidies and cash transfers to low-income households will aid household spending. The construction and investment sectors are also anticipated to remain robust, backed by a second wave of data center development in 2H 2026, as well as major public infrastructure projects such as the Penang light rail transit and Kerian water project in Perak.
Additionally, the manufacturing and external trade sectors are projected to experience growth, fueled by advancements in artificial intelligence (AI) and a surge in global semiconductor sales, which are expected to reach US$1.5 trillion (RM6.1 trillion) in 2026, marking a significant increase from US$795.6 billion in 2025.
Written by urgent.news from Malay Mail's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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