Malaysia's Economy May Grow Above 5% in 2026, CIMB Says
CIMB economists see Malaysia's 2026 growth slightly above 5.0% and expect Bank Negara to keep its 2.75% policy rate in November despite firmer activity.
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what happened
Economists Chew Khai Yen and Michelle Chia at CIMB, in a note reported by Market Talk, expect Malaysia's economy to expand slightly more than 5.0% in 2026. Resilient exports and a firmer manufacturing sector are providing support.
Third-quarter GDP rose 5.3% year on year, lifting nine-month growth to 5.5%. Although expansion has been stronger than expected, CIMB still sees Bank Negara Malaysia holding its overnight policy rate at 2.75% in November, given cooling domestic activity and contained inflation.
CIMB forecasts headline inflation easing to 1.8% in September and core inflation to 1.6%, down from 1.9% and 1.7% in August. However, income and wage measures in Budget 2027 could add to price pressures, particularly in the second half of 2027, raising the chance of a rate hike next year.
why it matters
For markets, the mix of strong growth and moderate inflation matters. If budget measures push prices higher faster, rate expectations could shift toward tightening, which would affect the outlook for the local currency and Malaysian government bonds.
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sources
- Malaysia's Economy Could Post Above 5% Growth in 2026 — Market Talk, 16 October 2026 at 08:53 UTC
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