KUALA LUMPUR, April 9 (Xinhua) -- Malaysia's economic growth is expected to slow to 4.4 percent in 2026, weighed down by global uncertainty, softer export momentum, a gradual normalization in investment activity, and base effects from a strong prior year, the World Bank said Thursday.
"Heightened uncertainty surrounding the global economic environment is also expected to weigh on sentiment and temper the pace of expansion," the bank said in its Malaysia Economic Monitor report.
Domestic demand is projected to remain the main growth driver. Consumption is expected to stay resilient, supported by rising real wages and positive employment conditions.
Investment momentum is also expected to remain solid, underpinned by inflows for intermediate and capital goods and continued foreign investment in key sectors, including information and communications technology, electronics and electrical, chemicals, and data centers.
Exports, however, are likely to face headwinds as front-loading effects fade and higher tariff-related costs and supply chain disruptions weigh on external demand.
The World Bank noted that near-term growth risks are skewed to the downside, particularly from external factors such as the protracted conflict in the Middle East, persistent policy uncertainty, escalating trade restrictions, tighter global financial conditions, and a potential slowdown in the technology cycle.
Malaysia's economy finished 2025 on a high note, with fourth quarter growth accelerating to 6.3 percent -- its strongest quarterly performance in three years -- driven by resilient domestic demand, including robust private consumption and investment. ■
