Kuala Lumpur (VNA) – Malaysia's economic momentum is expected to gain further traction in 2026 following a series of measures announced recently by Prime Minister Anwar Ibrahim, according to UOB Global Economics & Markets Research.
UOB said these measures have been broadly welcomed by the business community, supporting confidence while sustaining activity in consumption, construction, and select services sectors.
The initiatives, spanning economic, business, and institutional reforms, are designed to ease cost-of-living pressures, reduce business expenses, and enhance governance.
Key measures supporting businesses include a lower service tax rate on rental for small- and medium-sized enterprises (SMEs), a one-year penalty-free transition period for e-invoicing, and the full settlement of excess tax refunds for the 2023 and 2024 assessment years. These measures are aimed at reducing operational costs, improving cash flow, and facilitating compliance for enterprises across sectors.
To boost consumption and construction activity, the Indonesian government will start early disbursement of cash aid, and accelerate the roll-out of small-scale infrastructure projects nationwide.
Regarding governance, the government will submit four bills to the parliament this year to promote institutional reforms, strengthen regulatory frameworks, and enhance transparency.
Combined with the 2026 budgetary measures unveiled in October 2025, the Visit Malaysia Year 2026 campaign and easing global trade risks, UOB expects these factors to underpin a steady growth trajectory for the economy.
The bank projected Malaysia's real GDP growth at 4.5% in 2026, at the upper end of the government's 4-4.5 % target.
UOB’s Markets Research noted that with anticipated economic resilience and continued fiscal support, Bank Negara Malaysia is expected to remain comfortable with its current monetary policy stance, leaving the overnight policy rate (OPR) unchanged at 2.75%.
This also aligns with signals from most major central banks indicating the end of their easing cycles, as the US Fed is also expected to hold rates in the first quarter./.
