KUALA LUMPUR, Aug. 17 (Xinhua) -- Economists have raised their forecasts for Malaysia's 2026 economic growth after a stronger-than-expected first half, citing resilient domestic demand, robust exports and the artificial intelligence (AI)-driven technology upcycle, although growth is expected to moderate in the second half.
Malaysia's economy grew 5.7 percent year-on-year in the first half of 2026, prompting Maybank Investment Bank to raise its full-year growth forecast to 5.3 percent from 4.9 percent.
The research house said in a note on Monday that the upgrade reflected stronger technology and trade tailwinds from the global AI-driven tech upcycle, as well as favorable commodity-related terms of trade arising from the Middle East conflict.
These were reflected in surging global semiconductor sales, stronger Malaysian electronics output and exports, and a robust trade surplus supported by exports including refined petroleum products and liquefied natural gas.
Maybank said its revised forecast, however, implied growth would moderate in the second half from the 5.7 percent first-half expansion, partly due to the high base following 5.7 percent growth in the second half of 2025.
Kenanga Research also said in a note on Monday that it upgraded Malaysia's 2026 gross domestic product (GDP) growth forecast to 5.3 percent from its previous range of 4.5 percent to 5 percent, citing the stronger first-half performance.
Private consumption, continued services sector expansion and ongoing public and private investment are expected to support growth, it said. Household spending should also benefit from stable employment, sustained wage growth and targeted government assistance.
However, Kenanga warned that external conditions remained a key risk amid geopolitical uncertainty, tariff-related tensions and commodity price volatility.
CGS International was more bullish, raising Malaysia's 2026 GDP growth forecast to 5.5 percent from 5 percent.
The research house said in a note on Monday that the stronger-than-expected first-half performance suggested concerns over a broad-based slowdown had yet to materialize, prompting it to revise its growth assumptions for the rest of the year. ■
