KUALA LUMPUR: Malaysia’s economic growth is expected to remain steady at around 4.0% to 4.5% in 2026 despite global uncertainties, supported by resilient domestic consumption, continued investments in infrastructure and industrial projects, the expansion of the digital economy, and a recovery in tourism ahead of Visit Malaysia 2026.
Deputy Economy Minister Datuk Indera Mohd Shahar Abdullah said the country entered 2026 on a solid footing, with the economy expanding 5.2% in 2025, surpassing earlier projections.
Economic momentum strengthened towards the end of last year, with growth accelerating to 6.3% in the fourth quarter of 2025 – the fastest pace in about three years.
Inflation has remained manageable at around 1.5% to 2%, while the labour market continues to show strength, with unemployment hovering at roughly 2.9%. “These indicators reflect an economy that remains resilient despite a challenging global environment,” he said at the Second Asean Banking and Finance Summit 2026 today.
On the Johor–Singapore Special Economic Zone (JS-SEZ), Mohd Shahar said the initiative is designed to deepen supply chain integration and strengthen cross-border investment flows between Malaysia and Singapore.
He noted that in the first nine months of 2025, projects linked to the JS-SEZ accounted for 75% of Johor’s total investment volume, reinforcing the state’s position as a key global investment destination.
“As we move through 2026, our focus has shifted decisively from planning to full-scale implementation. With the ministry finalising the JS-SEZ Investment Blueprint and Masterplan, the financial sector now has a clear roadmap to support high-value industrial clusters and critical cross-border infrastructure,” he said.
Mohd Shahar stressed that the success of the JS-SEZ must be inclusive.
Under the 13th Malaysia Plan, the government is prioritising local supply chain integration and technology transfer to ensure small and medium enterprises are not sidelined but are instead integrated into global value chains.
He said the Johor Talent Development Council will play a central role in this effort by spearheading upskilling initiatives to build a high-income workforce.
“By aligning our local talent with the needs of the SEZ, we can reduce reliance on low-skilled foreign labour and ensure the JS-SEZ becomes a sustainable engine of national prosperity,” he added.
The summit, organised by the Asean Economic Club, World Digital Chamber, KSI Strategic Institute for Asia Pacific, the Economic Club of Kuala Lumpur and the Asean Business Club, carried the theme “Navigating Banking in a New Geo-economic Era – Enhancing Trust, Technology, Talent, Transformation.”
Finance Minister II Datuk Seri Amir Hamzah Azizan delivered the opening keynote, highlighting how Malaysia’s economy and financial institutions can strengthen resilience amid rising geopolitical and geoeconomic challenges.
