HSBC maintains Malaysia's GDP forecast at 4.5% this year

HSBC has reaffirmed its projection of Malaysia's Gross Domestic Product (GDP) growing by 4.5% this year. The bank noted that domestic inflation is not considered a high risk, largely due to government subsidies helping to stabilize petrol prices.

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From the external environment perspective, the prolonged conflict in West Asia underscores the benefits of the country as a net exporter of energy. Although Malaysia remains a net importer of crude oil, the country is also a major exporter of natural gas, thus positioning itself quite well in the current environment.

Desmond Kuang, Chief Investment Officer, Asia, Private Banking and Wealth Premier at HSBC, stated that Malaysia's GDP recorded a 5.4% year-on-year growth in the first quarter. This figure is lower than the over 6.0% growth seen in the fourth quarter of 2025. However, HSBC views this slowdown as a "normalization process" following an exceptionally strong prior period, rather than an indication of lost momentum.

Kuang highlighted that Malaysia's position as a net energy exporter is advantageous, especially amidst the prolonged conflict in West Asia. Although Malaysia is a net importer of crude oil, it is also a major exporter of natural gas, placing it favorably in the current global environment. HSBC expects resilient GDP growth and stable corporate earnings to continue supporting the Malaysian equity market, maintaining a neutral stance.

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From the external environment perspective, the prolonged conflict in West Asia underscores the benefits of the country as a net exporter of energy. Although Malaysia remains a net importer of crude oil, the country is also a major exporter of natural gas, thus positioning itself quite well in the current environment.

Looking globally, HSBC's Global Chief Investment Officer, Willem Sels, identified artificial intelligence, energy, and security as key drivers for the next wave of strategic investments. He anticipates these areas will bolster global economic growth and corporate earnings. Sels also pointed to increasing global competition and national security priorities as creating a more urgent need for funding, policy support, and capital market activity. Private markets are expected to play a larger role in bridging investment funding gaps.

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AI, energy and security are expected to lead the next wave of strategic investment, further strengthening global economic growth and corporate earnings.

HSBC's Third Quarter Investment Outlook remains optimistic about global economic resilience, with market volatility deemed manageable for now. The bank advises maintaining disciplined, resilient, and diversified portfolios to navigate short-term uncertainties while staying alert to long-term opportunities arising from structural growth trends.

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The priority right now is to remain disciplined with resilient and diversified portfolios that can withstand short-term uncertainty. At the same time, it is necessary to remain alert to long-term opportunities emerging from structural growth trends.