Economic Outlook

Malaysia’s economy is projected to record steady growth, expanding between 4.0 % and 4.8 % in 2025 and moderating slightly to between 4.0 % and 4.5 % in 2026. Economic expansion will be driven by resilient private sector expenditure and sustained public sector spending. Inflation is expected to remain contained, ranging between 1.3 % and 2.0 % in 2026.

The growth will be underpinned by robust performance in the construction and services sectors, which are anticipated to expand by 6.1 % and 5.2 % respectively. The manufacturing sector is expected to maintain steady growth of around 3.0 %, supported by continued demand and industrial recovery.

Domestic demand is expected to remain firm, with both private and public investments serving as key catalysts for economic growth in 2026. Investment activity is projected to strengthen, led by increased capital expenditure in technology-intensive industries such as manufacturing and services. Public investment will continue to play a pivotal role, particularly in strategic sectors including utilities, energy, and transportation, further reinforcing Malaysia’s medium-term growth trajectory.