KUALA LUMPUR: Malaysia’s economy is projected to grow by 5.3% in the first quarter of 2026 (Q1 2026) based on advance estimates, reflecting an economy that remains fundamentally resilient, despite rising global uncertainties, particularly elevated oil prices driven by geopolitical tensions, said the Department of Statistics Malaysia (DOSM).
Chief Statistician Malaysia Datuk Seri Mohd Uzir Mahidin said the manufacturing sector maintained positive momentum in the first two months of 2026, with output expanding by 7.3% and 4.2%, respectively, largely driven by export-oriented industries.
He said seasonal festive spending during the Chinese New Year, alongside preparations for Ramadan and Aidilfitri, continued to support overall economic activities.
“This, coupled with the disbursement of Sumbangan Asas Rahmah and the second phase of civil servant salary revisions, contributed to a steady growth in distributive trade sales, which increased by 7.3% in January and 5.3% in February 2026,” he said in a statement today.
On the external front, he said trade activity remained supported by continued expansion in both domestic exports and re-export.
A review of the sectoral performance indicates a moderation in growth momentum across the five main sectors in Q1 2026.
Mohd Uzir said the services sector continued to anchor overall GDP expansion, registering a 5.4% growth (Q4 2025: 6.3%).
“This sector’s performance was attributed mainly to the growth in the wholesale and retail trade sub-sector, reflecting sustained consumer spending, supported by a stable labour market, higher household income, and ongoing people-centric initiatives to stimulate household-related activities,“ he said.
Meanwhile, the information and communication sub-sector also contributed to the performance in the quarter, supported by rising demand for data centre and generative artificial intelligence (AI)-related activities.
The manufacturing sector recorded a growth of 5.8% (Q4 2025: 6.1%), largely supported by strong output in the electrical, electronics and optical products, as well as vegetable and animal oils and fats and food processing.
The construction sector’s growth declined to 7.8% in Q1 2026 (Q4 2025: 11%), supported primarily by specialised construction activities and non-residential buildings.
The agriculture sector grew 2.8% (Q4 2025: 5.4%), attributed to the growth in oil palm and livestock sub-sectors.
Meanwhile, the mining and quarrying sector slipped to negative 1.1% from 2.0% growth in the preceding quarter, influenced by lower production, particularly in crude oil and condensate and natural gas.
Following these advance estimates, the preliminary GDP data, which provides a detailed and comprehensive analysis of economic performance for Q1 2026, will be released on May 15.
