Malaysia’s economy remains on track for upper-end growth despite energy shock, says BNM governor
Malaysia’s economy remains on track to expand by between 4% and 5% in 2026, likely towards the upper end of the forecast range, despite the recent energy supply shock, Bank Negara Malaysia governor Abdul Rasheed Ghaffour said.
He said the country’s strong economic fundamentals, ongoing reform agenda and commitment to prudent economic management had enabled the government to respond effectively to external shocks.
Speaking at the opening of the two-day Sasana Symposium 2026 on Tuesday, Abdul Rasheed said Bank Negara Malaysia had continued to safeguard macroeconomic stability, creating conditions that allowed reforms to take root.
He said low and stable inflation, a sound financial system and orderly financial markets had provided a strong foundation for the country’s economic transformation.
Reforms strengthen economic resilience
Themed ‘Reforms for Resilience: Navigating Uncertainties’, the symposium features discussions on key economic and financial issues, including economic resilience, wages, cost of living, investment, energy security, Islamic finance and private healthcare costs.
Abdul Rasheed noted that Malaysia’s economy expanded by 5.2% last year, while inflation remained contained and the ringgit emerged as the best-performing currency in the region.
He also highlighted the country’s improving fiscal position, saying the fiscal deficit narrowed to 3.7% of gross domestic product (GDP) in 2025 from 6.2% in 2020.
According to him, the improvement has helped rebuild fiscal space at a time when demand for public resources continues to rise.
Financial system to evolve with economy
As Malaysia enters its next stage of development, Abdul Rasheed said the financial system must also evolve into one that is guided by values, delivers meaningful impact and operates responsibly.
He said Bank Negara Malaysia’s upcoming Financial Sector Blueprint 2026-2031 will be guided by three key aspirations, namely finance for a more resilient society, finance for a more prosperous society and a future-ready financial system.
He also stressed that future economic growth must be sustainable, noting that Malaysia is among the world’s 17 most biodiverse countries and that its natural resources are as valuable as its economic wealth.
On fiscal reforms, Abdul Rasheed said sustainable public finances remain central to national development, as investments in education, healthcare, infrastructure, climate resilience and social protection all depend on the government’s fiscal capacity.
Medium-term outlook remains favourable
Looking ahead, Abdul Rasheed said Malaysia’s medium-term economic outlook remains positive.
He said growth is expected to remain firm while inflation stays manageable, adding that Bank Negara Malaysia will continue taking the necessary measures to maintain price stability in support of sustainable economic growth.
