Malaysia's Economy Poised for 5.8% Growth in Second Quarter

Malaysia's economy is expected to expand by 5.8% in the second quarter of 2026, a slight increase from the 5.4% growth recorded in the previous quarter, according to preliminary estimates from the Department of Statistics. This growth trajectory brings the total economic expansion for the first half of 2026 to 5.6%, a notable rise from 4.5% in the same period of 2025.

The services sector continues to be the primary engine of economic growth, registering a 5.4% increase in the second quarter. Key subsectors contributing to this performance include wholesale and retail trade, information and communication, and transportation and storage. The manufacturing sector also demonstrated resilience, growing by 7.5%, largely propelled by export-oriented industries such as electrical, electronic, and optical products, as well as petroleum, chemical, rubber, and plastic products.

In contrast, the agriculture sector experienced a contraction of 3.7%, a reversal from the 2.6% growth seen in the previous quarter. This decline was observed across most subsectors, with the exception of 'other agriculture' and livestock. The mining and quarrying sector, however, showed a recovery, with a 10.2% increase driven by the natural gas subsector. The construction sector saw moderate growth of 6.6%, down slightly from 7.7% in the first quarter, supported by non-residential building projects like data centers.

AmBank Group Chief Economist Firdaos Rosli anticipates the second-quarter GDP to reach 5.6%, boosted by robust private consumption and domestic demand. He highlighted the significant increase in tourism activities as a major factor supporting private consumption. Additionally, both private and public sector investments remained stable, further contributing to the economic performance. The retail and wholesale trade sector's strong performance in the first quarter and the resilience of vehicle sales also indicate Malaysia's economic strength in the second quarter.