Govt sees economy growing up to 5.3% this year, but slowing in 2027
Strong domestic demand, private investment and robust E&E exports are expected to sustain expansion despite global uncertainties.
The Malaysian government has raised its economic growth forecast for 2026, projecting expansion between 4.8% and 5.3%, up from the previous range of 4.0% to 4.5%. This growth is expected to slow to between 4.2% and 5.2% in 2027, according to the Economic Outlook 2027 report released by the Finance Ministry.
Domestic demand, particularly private consumption, labor market strength, and income growth, will drive the economy forward this year. The government's support measures, such as the SARA, STR, and PJRM schemes, are expected to maintain household purchasing power amid rising energy prices and inflation. The report highlights the services sector, bolstered by tourism, retail, and transport, as the key growth driver for 2026.
The manufacturing sector is anticipated to benefit from technological advancements and the expansion of high-value industries, especially semiconductors and electrical and electronics. However, the government acknowledges the influence of external risks, including geopolitical tensions, changes in trade policies, and global market volatility, which could impact the outlook.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Govt sees economy growing up to 5.3% this year, but slowing in 2027 freemalaysiatoday.com
