MALAYSIA’S economy expanded by 5.4 per cent in the first quarter of 2026, surpassing earlier projections and reinforcing confidence in the government’s MADANI economic reform agenda amid heightened global uncertainty caused by conflict in West Asia.
Prime Minister Datuk Seri Anwar Ibrahim said the stronger-than-expected performance underscored the effectiveness of the government’s reform-driven approach in sustaining economic resilience.
“Approach this has enabled Malaysia to sustain growth momentum from 5.2 per cent in both 2024 and 2025, before rising further to 5.4 per cent in the first quarter of 2026,” he said.
The growth figure exceeded both the preliminary estimate by the Department of Statistics Malaysia and Bloomberg’s earlier forecast, which had projected Malaysia’s gross domestic product (GDP) growth for the quarter at 5.3 per cent.
Anwar said the latest performance also reflected the MADANI Government’s fiscal discipline and improvements in governance efficiency, which have strengthened the country’s economic foundations during a period of external volatility.
He added that prudent fiscal management had enabled the government to cushion the impact of rising global fuel prices on households and businesses through targeted initiatives such as BUDI MADANI RON95 (BUDI95) and enhanced assistance under BUDI Diesel, while continuing to support household spending.
Malaysia’s labour market also remained robust, with sustained job creation pushing the unemployment rate down to 2.9 per cent — the lowest level recorded in a decade — while inflation stayed moderate at 1.6 per cent.
According to Anwar, these developments continued to support resilient domestic demand, which remains a key driver of economic growth.
He further noted that the strengthening ringgit, now among Asia’s best-performing currencies, alongside firmer performance in the FTSE Bursa Malaysia KLCI and net foreign direct investment inflows amounting to RM22.8 billion, reflected growing investor confidence in the Malaysian economy. - May 15, 2026
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