KUALA LUMPUR, April 10 (Xinhua) -- Malaysia's economic growth is projected to moderate to 4.6 percent in 2026, the Asian Development Bank (ADB) said on Friday, citing lingering effects of policy tightening and external headwinds amid the Middle East conflict.
In its Asian Development Outlook (ADO) April 2026 report, the bank said delayed impacts from tax reforms and restrictive trade measures introduced in 2025 are expected to weigh on near-term expansion.
Growth is forecast at 4.5 percent in 2027, with risks tilted to the downside, particularly if geopolitical tensions in the Middle East persist.
Despite the softer outlook, domestic consumption should remain resilient, though some downside risks persist, the report said, adding that continued growth in employment and income levels will support household spending.
Exports, however, may face pressure from an uncertain global environment, it said.
The bank noted that medium-term growth could be underpinned by initiatives under Malaysia's 13th Malaysia Plan, which focuses on developing higher-value economic sectors, backed by 611 billion ringgit (about 153.81 billion U.S. dollars) in planned investments.
Malaysia's economy expanded 5.2 percent in 2025, up slightly from 5.1 percent in 2024, driven by robust domestic demand and broad-based sectoral growth despite a challenging external backdrop. ■
