BNM sees Malaysia growth near top of 2026 target

Bank Negara Malaysia projects that the Malaysian economy will grow between 4% and 5% in 2026 and sees outcomes “maybe likely towards the upper end of the range.” Governor Datuk Seri Abdul Rasheed Ghaffour reaffirmed this outlook in a keynote address at the Sasana Symposium on July 28, 2026. The central bank described the medium‑term prospects as favourable, supported by a combination of domestic and external drivers.

Policymakers presented the trajectory as one of resilience, with growth targets still achievable despite a challenging global backdrop. They indicated that Malaysia remains on track to meet its official forecast range, with recent data and investment trends reinforcing confidence in the expansion.

Headline inflation in Malaysia eased to 1.9% in June 2026, indicating relatively contained price pressures. This moderation has given Bank Negara additional room to balance its policy objectives of supporting growth while preserving price stability.

The benchmark policy rate has been kept unchanged after being cut to 2.75% in July 2025. With inflation easing and growth holding up, the central bank signalled that its current policy stance remains consistent with sustaining economic momentum while guarding against renewed inflation risks.

Bank Negara highlighted a boom in artificial intelligence‑related investment as an important driver of Malaysia’s current and expected growth. These investments are contributing to activity in technology‑linked sectors and supporting broader productivity gains.

Resilient electrical and electronics exports were also cited as a key pillar of the outlook, helping to offset external headwinds. Alongside this, robust domestic demand has underpinned overall economic performance, providing a cushion against volatility in global trade and financial conditions.

The central bank noted that Malaysia’s status as an energy‑producing country reduces its reliance on oil and gas imports compared with some regional peers. This structural feature provides a measure of protection against recent energy supply shocks.

By having its own energy production base, Malaysia is less exposed to sudden surges in imported energy costs. Bank Negara indicated that this buffer supports macroeconomic stability and helps sustain growth prospects amid uncertainty in global energy markets.

While emphasising a positive baseline, Bank Negara acknowledged that external risks remain. These include ongoing trade tensions and evolving conditions in global energy markets, which could affect demand and price dynamics.

Policymakers reiterated their commitment to act in a way that preserves price stability while supporting sustainable growth. The central bank’s current assessment is that Malaysia’s economy is well positioned to navigate external challenges, given its growth drivers, easing inflation and comparatively strong energy position.