KUALA LUMPUR (April 17): Malaysia’s economy grew at a softer-than-expected pace in the first quarter of 2026 as activities in the key manufacturing and services sectors decelerated.
Gross domestic product expanded 5.3% in January-March from the same quarter a year earlier, according to initial data from the Department of Statistics Malaysia. A Bloomberg poll called for a median 5.5% increase, and the latest print was lower than the 6.3% year-on-year rise in the final quarter of 2025.
“Malaysia’s first quarter of 2026 reflects an economy that remains fundamentally resilient, even amid rising global uncertainties, particularly elevated oil prices following geopolitical tensions,” said chief statistician Datuk Seri Dr Mohd Uzir Mahidin.
The supply-side data provides an early glimpse into the Middle East conflict now in its second month. A fragile truce reached with Iran is now at risk as the US blockades the Strait of Hormuz critical for shipping of one-fifth of the world’s oil and gas supply.
The second more comprehensive data will be released on May 15.
The services sector — which accounts for more than half of Malaysia’s economy — expanded 5.4% in the first quarter, underpinned mainly by growth in wholesale and retail trade.
Manufacturing grew 5.8%, supported by strong output in the electrical, electronic and optical products segment, as well as in food processing and vegetable and animal oils and fats. Agriculture grew 2.8%, driven by higher production in the oil palm and livestock sub-sectors.
Construction activities also slowed to 7.8% with most works supported by specialised construction works and non-residential projects. Overall growth was also dragged by 1.1% contractions in the mining and quarrying sector from lower production of crude oil, condensates and natural gas.