Malaysia's 1Q GDP to grow by 5.3%

Malaysia’s economy is projected to grow by 5.3% in the first quarter of 2026 (1Q 2026) based on advance estimates, reflecting an economy that remains fundamentally resilient, despite rising global uncertainties, particularly elevated oil prices driven by geopolitical tensions, said the Department of Statistics Malaysia (DOSM).

Its chief statistician, Mohd Uzir Mahidin, said the manufacturing sector maintained positive momentum in the first two months of 2026, with output expanding by 7.3% and 4.2%, respectively, largely driven by export-oriented industries. He said seasonal festive spending continued to support overall economic activities.

Mohd Uzir said the services sector continued to anchor overall GDP expansion, registering a 5.4% growth (4Q 2025: 6.3%).

"This sector’s performance was attributed mainly to the growth in the wholesale and retail trade sub-sector, reflecting sustained consumer spending, supported by a stable labour market, higher household income, and ongoing people-centric initiatives to stimulate household-related activities," he said as quoted by Malaysian National News Agency (BERNAMA).

Meanwhile, the information and communication sub-sector also contributed to the performance in the quarter, supported by rising demand for data centre and generative artificial intelligence (AI)- related activities.

The manufacturing sector recorded a growth of 5.8% (4Q 2025: 6.1%), largely supported by strong output in the electrical, electronics and optical products, as well as vegetable and animal oils and fats and food processing.

Mohd Uzir added that the construction sector’s growth declined to 7.8% in 1Q 2026 (4Q 2025: 11.0%), supported primarily by specialised construction activities and non-residential buildings. The agriculture sector grew 2.8% (4Q 2025: 5.4%), attributed to the growth in oil palm and livestock sub-sectors.

WAM