Malaysia's economy expanded by 5.3% in the first quarter of 2026 compared with the same period a year earlier, according to advance estimates released by the national statistics authority on Friday. The pace represents a cooling from the 6.3% annual gain recorded in the fourth quarter of 2025, which was the fastest quarterly rise in three years and was driven by stronger domestic demand, exports and investment.
Officials said the January-to-March period benefitted from continued expansion in the manufacturing, services and construction industries, though the statistics department noted that overall momentum eased relative to the previous quarter.
By contrast, the mining and quarrying sector contracted by 1.1% in the quarter, a decline attributed to lower output, particularly in crude oil and natural gas.
Chief Statistician Mohd Uzir Mahidin commented on the advance estimate, saying, "Malaysia's first quarter of 2026 reflects an economy that remains fundamentally resilient, even with the rising global uncertainties, particularly elevated oil prices following geopolitical tensions."
Authorities will publish the final, comprehensive first quarter GDP figures on May 15.
Monetary policymakers have already adjusted their outlook for the year. Last month, the central bank raised its growth forecast for 2026 to a range of 4% to 5%, up from an earlier projection of 4% to 4.5%. The bank said the upgrade was supported by household spending, steady exports and tourism.
For context, Malaysia's economy grew 5.2% over the course of last year, exceeding expectations as the country recorded high trade values and approved investment flows.
Bank Negara Malaysia has cautioned that ongoing supply disruptions and higher fuel prices stemming from the prolonged conflict in the Middle East present risks to both the country's growth and inflation trajectories.
Separate data released on the same day showed consumer prices rose 1.7% in March from a year earlier, matching the median analyst forecast and up from a 1.4% increase in February.
Key points
- Advance GDP estimate for Q1 2026: 5.3% year-on-year growth.
- Growth supported by manufacturing, services and construction; mining and quarrying fell 1.1% due to lower crude oil and natural gas output.
- Bank Negara Malaysia raised its 2026 growth forecast to 4% to 5%, citing household spending, exports and tourism.
Risks and uncertainties
- Elevated oil prices and supply disruptions linked to prolonged conflict in the Middle East could pressure growth and inflation - sectors affected include energy, transport and manufacturing.
- Lower mining output signals vulnerability in the energy and commodity-related segments of the economy, which may influence export performance and fiscal receipts.