Kuala Lumpur (VNA) - Amid uncertainties in global trade and weak external demand, Malaysia’s Ministry of Finance projects the country’s economy to grow at a moderate pace in 2026.
In its Pre-Budget Statement 2026, the ministry stated that growth will be anchored by resilient domestic demand, particularly through private investment, stable employment, and income-enhancing measures such as targeted cash transfers and wage increases. The tourism sector, driven by Visit Malaysia 2026, is also set to contribute significantly to services growth. In this context, Budget 2026 will prioritise strengthening domestic sources of growth, diversifying export markets, and expanding household income opportunities.
Public investment will be advanced through strategic projects under the 13th Malaysia Plan (13MP) and increased domestic direct investment (DDI) by government-linked investment companies (GLICs) through the Government-linked Enterprises Activation and Reform Programme (GEAR-uP), reinforcing the foundations for inclusive and sustainable economic resilience.
In the first quarter of 2025, gross domestic product (GDP) expanded 4.4%, driven by household consumption, investment and the construction sector. The momentum is expected to continue in the second quarter of 2025, with an advance estimate indicating growth at 4.5%. Despite global developments, the Malaysian economy remained resilient and is projected to expand by 4-4.8% in 2025. Inflation abated further to 1.1% in June from 2% in the previous year, marking the lowest pace in 52 months.
Meanwhile, the labour market continued to strengthen, with the national unemployment rate declining to 3% in May, down from 3.3% in May last year.
On currency, the ringgit emerged as one of Asia’s best-performing currencies as at August 6, appreciating 5.8% to 4.2270 MYR against the US dollar./.
