KUALA LUMPUR, May 15 — The Malaysian economy recorded a firm growth of 5.4 per cent in the first quarter of 2026, driven by strong domestic demand and a continued surge in electrical and electronics (E&E) exports, Bank Negara Malaysia (BNM) announced today.
While moderating slightly from the 6.3 per cent growth seen in the previous quarter, the performance underlines the nation’s economic resilience amid growing global uncertainties.
Household spending remained a key pillar, supported by a healthy job market and targeted government assistance. Investment activity was also robust, fuelled by the progress of multi-year projects and national master plans.
On the supply side, the manufacturing sector’s performance was bolstered by strong global demand for E&E components related to artificial intelligence and data centres.
However, growth in the services sector slowed, partly due to a normalisation in car sales after a rush to buy electric vehicles before import duty waivers expired at the end of 2025.
Headline inflation saw a slight increase to 1.6 per cent during the quarter, reflecting some initial cost pressures from higher global energy prices. Core inflation, which excludes volatile items, moderated to 2.1 per cent, suggesting that underlying price pressures remain contained.
In a positive development, the ringgit appreciated by 0.5 per cent against the US dollar during the quarter, despite a broadly stronger dollar globally.
BNM attributed the currency’s strength to Malaysia’s solid economic fundamentals and continued foreign investment inflows.
Looking ahead, BNM Governor Datuk Seri Abdul Rasheed Ghaffour said Malaysia is facing global challenges from a position of strength.
“The Malaysian economy is expected to remain resilient in 2026, with growth expected to come in within the range of 4 per cent to 5 per cent, supported by steady domestic demand and continued expansion in our export performance,” he said in a statement.
To support businesses navigating current challenges, BNM also highlighted several new initiatives, including a RM5 billion relief facility for SMEs affected by the Middle East conflict and a forthcoming RM10 billion BNM-CGC Guarantee Scheme aimed at strengthening long-term business resilience.
