UOB economists Julia Goh and Loke Siew Ting observe Malaysia’s 4Q25 GDP grew 6.3% year-on-year, the quickest since 4Q22, lifting full-year 2025 development to five.2%. They challenge actual GDP development to gradual to 4.5% in 2026 as base results and exterior uncertainties weigh, although home demand, funding, tourism and AI-related exercise are anticipated to maintain general growth stable.
Home demand cushions slower 2026 GDP
“Going ahead, we count on actual GDP development to average to 4.5% in 2026 (from 5.2% in 2025, MOF est: 4.0%-4.5%) amid persistent exterior uncertainties and base results.”
“Home demand ought to stay the important thing anchor, supported by continued authorities coverage measures, the rollout of catalytic initiatives underneath nationwide grasp plans, the realisation of excessive permitted investments, stronger tourism flows along with Go to Malaysia Yr 2026, and ongoing momentum from the AI increase.”
“For the whole 12 months of 2025, the present account surplus rose to MYR31.8bn or 1.6% of GDP (2024: +MYR27.7bn or 1.4%). Backed by an anticipated enchancment in vacationer actions, modest items export development, and continued ICT-related companies exports, we challenge the present account surplus to succeed in MYR38.0bn or 1.8% of GDP in 2026 (MOF est: +MYR23.2bn or 1.1%).”
“Externally, geopolitical dangers have resurfaced whereas US President Trump revived focused tariff measures in mid-Jan, saying a 25% tariff on international locations doing enterprise with Iran (on 12 Jan) and a 25% levy on sure superior computing chips (on 14 Jan). Though the US Supreme Court docket has postponed its ruling, the one-year pause in US–China tariff escalation till Nov 2026 supplies short-term stability and helps ongoing supply-chain diversification.”
“That is anticipated to constantly supply uneven however optimistic spillovers to Malaysia’s commerce outlook.”
(This text was created with the assistance of an Synthetic Intelligence device and reviewed by an editor.)
