KUALA LUMPUR (May 15): Malaysia’s economy expanded at a slower pace in the first quarter as consumer spending and business investment decelerated while surging exports propped up growth.
Gross domestic product rose 5.4% in the first three months of 2026 when compared to the same quarter a year earlier, according to the Department of Statistics Malaysia. The rate was a smidge higher than the official first estimate of 5.3% but much lower than 6.2% year-on-year growth in the Oct-Dec quarter.
There was a marginal contraction on a seasonally-adjusted quarter-on-quarter basis.
“The impact of Middle East tensions on Malaysia remains contained,” said Bank Negara Malaysia governor Datuk Seri Abdul Rasheed Ghaffour. This year, growth is expected to come in within the earlier forecast range of 4.0%-5.0%, he noted.
The projection had taken into account both external shocks and domestic drivers, he said, adding that the outlook remains supported by consumption, investment and exports.
On the demand side, growth of private consumption moderated to 4.7% in the first quarter and private investment to 7.8%. Year-on-year, public consumption rose 4.1% while public investment increased 5.3%.
Net exports also rebounded 13.5% as outbound shipments grew faster than imports.
On the supply side, the services sector — which accounts for more than half of Malaysia’s economic output — expanded 5.6% in the first quarter from a year earlier. However, the pace was sharply slower than the 6.2% growth registered in the final quarter of 2025.
Growth of manufacturing activities, meanwhile, was a tad slower at 5.9% during the quarter that was largely supported by export-oriented industries, particularly electrical and electronic products.
Mining production, however, contracted 2.1% as output of both crude oil and natural gas declined while the construction sector's growth moderated to 7.7%.
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