MBSB IB Anticipates Malaysia’s Economy To Grow By 5.9 Pct Y-o-Y in 2Q 2026

KUALA LUMPUR, Aug 14 (Bernama) -- MBSB Investment Bank Bhd (MBSB IB) anticipates Malaysia’s economy to grow by 5.9 per cent year-on-year (y-o-y) in the second quarter of 2026 (2Q 2026), slightly above the advance estimate of 5.8 per cent.

In a research note, it said the upside is expected to be driven mainly by construction and a stronger trade balance, while manufacturing and services should broadly track the advance readings.

“We expect growth to moderate in the second half of 2026 (2H 2026) as favourable base effects fade and elevated energy prices and geopolitical uncertainty weigh on demand.

“For 2026, we foresee Malaysia could maintain growth around 5.0 per cent for the third consecutive year, taking into account the resilient growth in 1H 2026 and the more robust growth in external trade,” it said. 

According to MBSB IB, domestic demand should remain an important growth anchor, as reflected in the robust growth in distributive trade, including sustained growth in retail trade and a pick-up in spending on motor vehicles.

“External trade is also expected to support 2Q 2026 growth. Strong electrical and electronics-related demand and re-exports underpin the export performance,” it said. 

Meanwhile, it expects growth in services to remain close to the 5.4 per cent y-o-y advance estimate.

“Distributive trade expanded strongly by 12.1 per cent y-o-y in 2Q 2026, although retail trade growth was more moderate at 6.7 per cent y-o-y.

“Together with stable employment, tourism activity and contained inflation, the data suggest services activity remained resilient, albeit with some moderation in consumer momentum towards the end of the quarter,” it said. 

-- BERNAMA