KUALA LUMPUR, March 31: Malaysia's central bank raised its 2026 economic growth forecast to 4%-5%, up from previous projections, citing strong domestic demand and resilient financials.
Despite ongoing trade disruptions and higher fuel prices driven by the Middle East conflict and U.S. tariffs, Bank Negara Malaysia (BNM) said the economy remains on solid footing. The central bank noted that Malaysia’s status as a net energy exporter offers some protection.
The 2025 economy grew by 5.2%, exceeding expectations, with record trade volumes and investments.
BNM also highlighted favorable domestic financial conditions, supported by a strong banking system and deep institutional investor base. Headline inflation is projected to rise to 1.5%-2.5% in 2026, while core inflation is expected at 1.8%-2.3%.
The central bank left its key interest rate unchanged at 2.75%, signaling readiness to respond to further volatility.
This upbeat forecast contrasts with declines seen elsewhere amid global tensions.