KUALA LUMPUR: Bank Negara Malaysia (BNM) is cautiously optimistic on Malaysia’s 2026 growth outlook, citing supportive economic tailwinds while noting that global uncertainties remain elevated, said governor Datuk Seri Abdul Rasheed Ghaffour.
He said the combination of domestic demand, investment, exports especially E&E driven by AI, tourism, and strong economic fundamentals are expected to drive Malaysia’s economic growth this year.
“We have strong fundamentals. It has been mentioned that we have a diversified economy and diversified export markets. We have a strong banking sector to support intermediation, and we have a strong external sector as well. The AI boom will definitely continue to provide demand for our E&E sector,” he said at the Malaysia Economic Forum 2026 yesterday.
Abdul Rasheed said it is important for the central bank to ensure it provides a conducive environment through monetary and financial stability to achieve sustainable growth.
“I would say that we are cautiously optimistic of 2026 while we do see the tailwinds coming in, but of course there’s still a lot of uncertainty there. In terms of risk, we know there is a lot of uncertainty,” he added.
He said Malaysia entered 2026 on a strong footing, with growth last year estimated at 4.9% based on third- and fourth-quarter figures. “This is on the upper hand of our initial forecast. In fact, it is even when we are above our forecast range at 4.9%. So all the engines of the economy are firing.”
Consumption continues to be supported by high labour force participation, strong wage growth and government policy measures.
“And we see unemployment is at the lowest right now, it’s about 3%. So this means consumption will be continuing to be supported even as we enter into 2026.”
On investment, Abdul Rasheed said Malaysia has been in an investment upcycle since 2023.
“And the kind of investment that we’re getting right now are the high quality investments, which creates high value added activity, which creates high income jobs. And again, this will support consumption as well.”
The external sector has remained resilient despite tariffs and trade disruptions, with exports continuing to grow, Abdul Rasheed said. “For example, if we look in terms of the export, export continues to grow and demand continues to be there, especially for the E&E sector.”
He said the AI industry growth has supported Malaysia’s E&E sector in terms of demand.
“In fact, when we have engagement on the ground with the companies, we do see strong order books for the E &E as well. Why is this so? It’s because our E&E is actually well plugged into the global value chains for AI itself.”
In addition, tourism has emerged as a key growth driver, with tourist arrivals from January to October last year surpassing both 2023 levels and pre-pandemic figures.
“One important point here is that even the per capita spending by the tourists has also been higher than what we saw during the pandemic. And all these factors will continue to support growth in 2026 as well,” Abdul Rasheed said.
