MALAYSIA'S economy is on track to grow by more than 5% this year, supported by robust exports and sustained domestic demand, despite mounting global uncertainties, Bank Negara Malaysia (BNM) said today as it kept the Overnight Policy Rate (OPR) unchanged at 2.75%.
The Monetary Policy Committee (MPC) maintained the benchmark interest rate for the ninth consecutive meeting, with the last adjustment made in July 2025.
BNM said recent indicators pointed to continued strength in economic activity in the third quarter of 2026, driven by strong export performance and resilient domestic demand.
The country's sound economic fundamentals were also expected to sustain growth in 2027, with the external sector remaining a major contributor through the global technology upcycle and firm tourist spending.
Stable labour market conditions and ongoing investment activity would continue supporting domestic demand, while measures under Budget 2027 were expected to provide further impetus to private consumption.
However, BNM warned that a prolonged conflict in the Middle East and lower commodity production could undermine the growth outlook.
On inflation, the central bank said headline and core inflation averaged 1.8% and 1.9% respectively year-to-date.
Both measures were expected to edge higher in 2027 amid geopolitical developments, elevated global commodity prices and adverse weather conditions, although inflation was projected to remain contained.
Globally, economic growth remained resilient, supported by strong technology investment and stable labour markets, but inflation had edged higher following increases in energy costs.
BNM said prolonged geopolitical tensions, tighter global financial conditions, concerns over financial market valuations and fiscal vulnerabilities remained key downside risks to global growth.
Nevertheless, stronger technology-related spending and a faster-than-expected recovery in supply chain conditions could provide additional upside support.
The MPC said it would remain vigilant to cost pressures and domestic demand conditions in assessing their implications for the inflation outlook.
"At the current OPR level, the MPC considers the monetary policy stance to be consistent with the outlook of continued price stability and sustainable economic growth," it said today.
The committee would continue monitoring economic developments and assessing the balance of risks surrounding domestic inflation and economic growth. - November 5, 2026
