MALAYSIA’S economy continued to show resilience against global uncertainty, expanding 5.8% in the second quarter of 2026 and outperforming market expectations, according to preliminary estimates by the Department of Statistics Malaysia (DOSM).
The latest growth figure exceeded economists’ median forecast of 5.2% in a Bloomberg survey and marked an acceleration from the 5.4% expansion recorded in the first quarter of 2026.
The Finance Ministry, in a statement of Friday, said the stronger performance was driven by sustained growth across key economic sectors, particularly services, manufacturing, mining and quarrying, and construction, highlighting the strength and diversity of Malaysia’s economic base.
The expansion came despite mounting external pressures, including the ongoing West Asia conflict, disruptions to shipping routes through the Strait of Hormuz, higher energy prices and rising logistics costs that have affected global supply chains.
For the first half of 2026, Malaysia’s economy expanded 5.6%, significantly higher than the 4.5% growth recorded during the same period last year.
Malaysia’s Q2 growth also placed it ahead of several major regional economies, surpassing Singapore’s 5.7% expansion and China’s 4.3%, although Vietnam recorded stronger growth at 8.4%.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said the performance reflected Malaysia’s stronger economic fundamentals and the impact of reforms under the MADANI Economic Framework.
“The MADANI Economic Framework has strengthened the country’s ability to sustain growth despite the turbulence affecting the world. However, we must recognise that this achievement requires us to remain committed to the path of reform,” he said.
Anwar, however, cautioned that strong headline growth did not mean all Malaysians and businesses had fully recovered from global pressures.
He said the Government remained focused on easing the burden on households, securing essential supplies and supporting businesses affected by international disruptions.
Since April 2026, the Government has activated the Crisis Management Task Force to work with industries in identifying critical supplies and sourcing alternatives to minimise disruptions.
The Government has also channelled more than RM15 billion in financing support for micro, small and medium enterprises (MSMEs) and micro-entrepreneurs to help businesses manage rising costs and maintain operations.
The support includes financing facilities provided through Bank Negara Malaysia, financing guarantees and micro-financing programmes involving government agencies and development financial institutions.
Despite external challenges, inflation remained manageable at 1.9% in the second quarter of 2026, reflecting stable domestic price conditions.
The Government also maintained subsidised RON95 petrol under BUDI MADANI RON95 (BUDI95) at RM1.99 per litre and introduced BUDI MADANI Diesel at RM2.10 per litre for eligible recipients to cushion the impact of higher operating costs.
“No one can predict every challenge ahead. However, the Government’s responsibility remains clear — to protect the people’s welfare, ensure sustainable economic growth and preserve the country’s fiscal responsibility,” Anwar said.
“The MADANI Government will continue to carefully consider every measure so that no group is left behind, businesses can continue operating and national resilience is further strengthened,” he added.
DOSM is expected to release the preliminary Q2 2026 GDP report on Aug 14, with the latest figure subject to revision once more comprehensive data becomes available. - July 17, 2026
