KUALA LUMPUR (Aug 14): Malaysia’s economic growth has exceeded Bank Negara Malaysia’s (BNM) expectations for the past three quarters, putting full-year growth on track to come in at around 5% — the top end of the central bank’s 2026 forecast.
BNM is maintaining its official gross domestic product (GDP) growth forecast of 4%-5% for now, but governor Datuk Seri Abdul Rasheed Ghaffour said recent data and high-frequency indicators suggest growth is likely to be around 5%.
“We believe that given the data points that we have seen so far and the high-frequency data, we believe it will be around 5%,” Abdul Rasheed told reporters at a press conference on Friday.
Malaysia’s economy expanded by 6% year-on-year in the second quarter of 2026 (2Q2026), accelerating from 5.4% in the preceding quarter and exceeding the official advance estimate of 5.8%.
Abdul Rasheed said the key drivers of growth, including household consumption, investment, exports and tourism, remain intact heading into the second half of the year.
“We have been experiencing growth that is above our expectation for the last three quarters,” he said.
While BNM is not ruling out growth exceeding 5%, the central bank is holding off on revising its official forecast for now. Abdul Rasheed said any revision would normally be made around the government’s budget announcement.
Still, growth could moderate in the second half due partly to a higher base last year, while uncertainty surrounding the Middle East conflict remains a key downside risk.
BNM sees upside risks from a de-escalation of the Middle East conflict, stronger electrical and electronics demand and higher tourism activity. A prolonged conflict and weaker-than-expected commodity production, meanwhile, could weigh on growth.
Despite the strong growth recorded so far, Abdul Rasheed said BNM does not see signs that the Malaysian economy is overheating.
“Demand is steady and resilient, but it's not excessive,” he said.