Malaysia’s economy grew 6% year-on-year in the second quarter of 2026, revised up from a preliminary 5.8% estimate and faster than 5.4% in the first quarter, as resilient exports, household spending and investment helped cushion risks linked to the Middle East conflict. On a seasonally adjusted quarterly basis, GDP rose 2.5% after a marginal 0.03% contraction in Q1. Bank Negara Malaysia said the expansion was broad-based, with every sector except agriculture improving from the previous quarter. The central bank attributed the momentum to household spending supported by steady income growth and policy measures, increased investment, and stronger exports led by electrical and electronics products, services, and a rebound in liquefied natural gas and non-E&E manufactured shipments. BNM Governor Abdul Rasheed Ghaffour said commercial demand is expected to remain resilient, driven by household spending and investment activities. He said 2026 growth is likely to come in around 5%, the upper end of the central bank’s 4% to 5% forecast range, after the economy expanded 5.2% in 2025 and 5.7% in the first half of 2026. He also said headline inflation is projected to average 1.5% to 2.5% in 2026, with targeted fuel subsidies and stable demand conditions expected to help contain the pass-through from higher global costs. In July, the central bank left its benchmark interest rate unchanged for a sixth straight meeting and said the policy stance remains appropriate for price stability and sustainable growth.