Malaysia projected to expand 4.7% in 2026 as Southeast Asia outlook strengthens
The World Economic Forum forecasts Malaysia's economy will grow by 4.7% in 2026, driven by tech-related exports, investment and solid domestic demand.
According to the World Economic Forum’s latest Chief Economists’ Outlook, Malaysia is slated to achieve a 4.7% GDP increase in 2026, supported by technology-related exports, ongoing investment and robust household demand. The survey, conducted in early August, shows that 97% of chief economists anticipate Southeast Asian growth to either moderate or strengthen over the coming year, with a majority expecting stronger performance than earlier forecasts.
Country-specific projections vary, with Vietnam forecast at 7.5% and Thailand at 1.9% for the same period. Labour market sentiment is upbeat, as 79% foresee unchanged unemployment and 14% predict a decline. Inflation expectations have shifted lower, with moderate inflation now expected by a slight majority, though regional inflation is projected at 3.9% in 2026, up from 3.2% earlier in the year due to higher global energy and food prices.
Why it matters
The outlook signals a robust recovery path for Malaysia and highlights broader resilience in Southeast Asia's economies.
How this story developed
- Sep 9 ASEAN leaders warn connectivity alone won’t bridge emerging AI divide
- Sep 16 The Malaysian government is consulting Malaysia Airlines and Batik Air about taking over AirAsia's domestic market share as the low-cost carrier faces financial strain.
- Sep 18 AirAsia announced a US$1 billion fundraising effort on the international debt market.
- Sep 20 India and Thailand met to assess accelerating the ASEAN‑India trade pact review.
- Sep 20 The Philippines and Canada reported that the fourth round of talks resolved the biggest sticking points in their pending free trade agreement. Both sides said only a small number of minor issues remain, to be addressed through follow-up meetings and virtual discussions in the coming months. The progress puts the pact on track for completion before the end of the year.
- Sep 22 EU trade chief Maros Sefcovic and Philippine Trade Secretary Cristina Roque announced a significant milestone in their free‑trade negotiations.
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