Malaysia's Q1 GDP growth slows to 5.4% as cost pressures loom
Malaysia's economy grew 5.4% year-on-year in the first quarter, slowing from the previous period. Rising oil prices and softer electronics exports are weighing on 2026 growth expectations.
Malaysia's statistics department said the economy expanded 5.4% year-on-year in the first quarter, down from 5.9% in the previous quarter. The services sector grew 6.1%, while manufacturing slowed to 4.1%.
Domestic consumption was the largest contributor to growth, but external demand was weak. The energy price spike from the Iran war is lifting diesel and electricity costs, and Bank Negara has signalled that inflation expectations may be revised upward.
According to analyst views compiled by Nikkei Asia, full-year growth could fall in a 4.8-5.2% range. Semiconductor exports will remain exposed to US-China tensions and to global tech demand, and analysts expect Kuala Lumpur equities to face pressure for the rest of 2026.
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