Malaysia’s economy grew by 6% in the second quarter of the year, supported by sustained domestic demand and a strong export sector, Bank Negara Malaysia (BNM) said.
The central bank said household spending continued to be supported by steady income growth and policy support, while investment expanded on the back of continued spending on structures, machinery and equipment.
Export growth was mainly driven by the electrical and electronics (E&E) and services sectors, as well as rebounds in exports of liquefied natural gas and non-E&E manufacturing products.
Gross imports also expanded further, supported by robust growth in imports of intermediate and consumer goods.
Growth expected to remain within forecast range
BNM governor Abdul Rasheed Ghaffour said the Malaysian economy remained on firm footing.
He said growth in 2026 was projected to remain within the forecast range of 4% to 5%, with recent developments indicating that overall growth could be around 5%.
‘While the outlook continues to be shaped by external developments, Malaysia is well-positioned to navigate these challenges from a position of strength and policy readiness,’ he said.
BNM said headline inflation rose to 1.9% in the second quarter from 1.6% in the first quarter, while core inflation moderated to 1.9% from 2.1% previously.
The increase in headline inflation was attributed to higher external cost pressures arising from the ongoing Middle East conflict, which affected fuel prices, particularly RON97 and diesel.
Ringgit remains largely stable
The central bank said the ringgit remained largely stable against the currencies of Malaysia’s major trading partners, supported by strong domestic fundamentals and sustained economic growth momentum.
‘Moving forward, while external factors will continue to drive exchange rate movements, Malaysia’s firm economic prospects and ongoing structural reforms are expected to provide enduring support to the ringgit,’ BNM said.
It added that financing remained available to support economic activity and business needs, while financial institutions continued to assist small and medium-sized enterprises (SMEs) facing temporary financial difficulties.
Repayment assistance, financing restructuring and tailored advisory services remain available to affected SMEs, which can also seek help through the Credit Counselling and Debt Management Agency’s small debt resolution scheme.
Support available for affected SMEs
BNM said targeted support was also available for viable SMEs affected by disruptions arising from the Middle East conflict through the SME Stabilisation Relief Facility.
In addition, SMEs can tap the RM10 billion BNM-CGC Guarantee Scheme to strengthen their resilience and competitiveness.
The central bank projected headline inflation to average between 1.5% and 2.5% for the full year, with indicators pointing to modest increases in consumer prices.
While the Middle East conflict could continue to create external cost pressures, BNM said its overall impact on inflation was likely to remain contained.
It said domestic policy measures, including targeted fuel subsidies and stable demand conditions, were expected to help limit the pass-through of higher global costs to domestic prices.
