THE nation has entered a prolonged phase of managing global supply disruptions rather than a short-term shock, as escalating geopolitical tensions centred around the Strait of Hormuz continue to reverberate through energy markets, logistics and domestic prices.
In a wide-ranging briefing, Economy Minister Akmal Nasrullah Mohd Nasir outlined the growing economic strain stemming from what it described as a widening global supply crisis affecting fuel, raw materials, food and services, with direct consequences for households and businesses.
“This is no longer a short-term shock. It is no longer just about oil prices, but has evolved into a global supply crisis affecting energy costs, logistics, raw materials, food, services, and ultimately the daily lives of the people,” he said today.
He said the current phase requires sustained management of cost pressures rather than immediate crisis response, noting that uncertainty surrounding the Strait of Hormuz continues to drive risk premiums, insurance costs and supply chain disruptions even when physical flows remain intact.
Between April 13 and 17, global Brent crude prices fell 11.6 per cent from US$131.67 to US$117.85 per barrel, after peaking at US$132.46 the previous week, still below the earlier high of US$144.46 following the outbreak of the West Asia crisis.
“However, this fluctuation does not mean the risk has subsided. Instead, it shows that the crisis is far from over, and the pressure is expected to persist.”
Officials warned that prolonged instability could take up to 18 months to stabilise global energy and supply chains, with Malaysia inevitably exposed to external shocks.
Despite the challenging environment, key domestic indicators remain resilient. The FTSE Bursa Malaysia KLCI rose to 1,695.21 points on April 17 and strengthened further to 1,702.30, signalling continued investor confidence.
Preliminary estimates from Department of Statistics Malaysia show the economy expanding 5.3 per cent in the first quarter of 2026, up from 4.4 per cent a year earlier, outperforming several regional peers.
“These figures should not be read as a signal that the pressure has passed. Rather, they show that the economy is holding firm amid ongoing external shocks.”
Inflation, however, has begun to edge higher, rising to 1.7 per cent in March from 1.4 per cent in February, driven largely by transport costs. Diesel prices in Peninsular Malaysia climbed to RM4.09 per litre from RM2.98, while RON97 rose to RM4.01 from RM3.11.
“This shows that the impact of the crisis is no longer confined to global markets. It is now filtering into transportation costs, logistics, prices of goods and daily household spending.”
Food prices have shown mixed movements, reflecting uneven supply pressures influenced by weather, input costs and logistics. Labour market conditions are also under close watch, with 4,708 workers reporting job losses in the first 16 days of April under the employment insurance system.
“Experience shows that the impact of energy cost shocks on employment tends to emerge with a lag.”
The government said the second quarter of 2026 would be critical in determining whether rising costs translate into broader job losses or reduced business activity.
In response, authorities are advancing structural measures to strengthen supply resilience, including the phased rollout of B15 biodiesel. Inspections indicate more than 70 per cent of blending depots are ready to implement the programme using existing infrastructure.
“This sends a clear message that energy can no longer be viewed solely from the perspective of supply. It must be addressed within a national framework linking energy security, commodity strength, logistics efficiency, supply chain resilience and economic durability.”
At the policy level, the National Economic Action Council has endorsed targeted interventions focusing on safeguarding supply chains, stabilising prices and supporting key industries.
Manufacturers have raised concerns over shortages of critical inputs and difficulties sourcing alternatives, prompting measures to facilitate logistics, mitigate risks and expand markets. Bilateral cooperation is being strengthened with countries including Australia and China to secure essential supplies such as fertiliser inputs, energy resources and industrial materials.
The tourism sector, meanwhile, is being repositioned as a key buffer against external shocks. Although 288 flights from West Asia were cancelled within a month of the crisis, the segment accounts for less than one per cent of arrivals.
Stronger growth from other markets offers opportunities. Visitor arrivals from China reached 4.7 million in 2025, with extensive flight connectivity supporting further expansion.
“Tourism is no longer just about increasing visitor numbers. It is critical for generating foreign exchange and offsetting external pressures.”
Authorities plan to refocus on more stable markets across ASEAN, East Asia, Australia and India, while extending the Visit Malaysia 2026 campaign to 2027 to support recovery and target 47 million visitors and RM329 billion in tourism revenue.
The government emphasised that economic resilience will depend on ensuring sufficient supply, maintaining adjustment capacity and protecting livelihoods during a prolonged period of uncertainty.
“In this period, we are required to make prudent adjustments together, including practising careful spending, saving energy and planning travel more efficiently to reduce fuel use and daily costs.”
Reaffirming its strategy, the government said its priority remains unchanged: to protect the public, secure essential supplies, support industry and sustain economic growth despite mounting global pressures. - April 21, 2026
