KUALA LUMPUR, July 3 (Xinhua) -- Research houses have raised Malaysia's 2026 economic growth forecasts after a stronger-than-expected first-half performance, citing resilient domestic demand, robust exports and a global artificial intelligence (AI)-driven technology upcycle despite lingering geopolitical and trade uncertainties.
Maybank Investment Bank said it had turned "constructive" from "conservative" on Malaysia's economy and raised its 2026 real gross domestic product (GDP) growth forecast to 4.9 percent from 4.4 percent.
The brokerage had cut its outlook in mid-May following the U.S.-Israel-Iran conflict, which raised concerns over higher oil prices, supply chain disruptions and potential blockades along the Strait of Hormuz.
However, economic indicators for April and May showed growth remained resilient, prompting expectations of another quarter of more than 5 percent year-on-year GDP expansion in the second quarter.
Maybank said the upgrade was driven largely by stronger prospects for the manufacturing sector and net external demand, supported by an AI-driven technology upcycle and favorable commodity-related terms-of-trade effects stemming from the Middle East conflict.
MBSB Research also raised Malaysia's 2026 GDP growth forecast to 4.5 percent from 4.2 percent, citing stronger-than-expected economic performance in the first half, underpinned by robust export growth and resilient domestic demand.
The research house said private consumption would remain the key growth driver, supported by a healthy labor market, wage growth, government support measures and tourism spending linked to Visit Malaysia Year 2026.
Meanwhile, investment and industrial activities are expected to benefit from ongoing infrastructure projects, continued inflows of high-value investments and sustained demand for commodities and manufactured goods.
Still, MBSB warned that growth could moderate in the second half as rising costs, global trade uncertainty and geopolitical risks weigh on business and consumer sentiment.
Separately, Hong Leong Investment Bank Research raised Malaysia's 2026 GDP growth forecast to 4.7 percent from 4.5 percent, citing strong electrical and electronics (E&E) exports.
The forecast is slightly above the government's point estimate of 4.5 percent but remains within its official growth range of 4 percent to 5 percent.
The research house expects headline growth to ease in the second half of the year from the pace seen in the first half, although domestic demand should continue to provide a stable foundation for the economy. ■
