Malaysia’s economy grows 6% year-on-year in Q2, beating expectations

KUALA LUMPUR: Malaysia’s economy grew 6 per cent in the second quarter from a year earlier, surpassing expectations as stronger export growth and steady household spending offset risks arising from the Middle East conflict, government and central bank data showed on Friday (Aug 14).

The growth was higher than the official advance estimate of 5.8 per cent, which was also the median forecast in a Reuters poll of economists, and stronger than the first-quarter expansion of 5.4 per cent.

Second-quarter growth was driven by a better performance in all sectors except for agriculture, the data released by the Statistics Department and Bank Negara Malaysia showed.

BNM Governor Abdul Rasheed Ghaffour said growth in 2026 was likely to be around 5 per cent, the upper end of the central bank’s forecast of a 4 to 5 per cent expansion. The economy grew 5.2 per cent last year.

“Commercial demand is expected to remain resilient, and this is driven by household spending and investment activities,” he told a press conference.

The Southeast Asian country has largely been cushioned from economic shocks arising from the Middle East conflict by firm domestic demand, steady investments and export growth.

Last month, the central bank kept its benchmark interest rate steady for the sixth straight policy meeting amid muted inflation.

On Friday, Abdul Rasheed said inflation was expected to remain contained this year, in part due to fuel subsidies and other government assistance, though higher global commodity prices were expected to place upward pressure on prices.

The central bank considered its monetary policy stance to be “appropriate and consistent with the outlook of the continued price stability and sustainable economic growth,” he said.