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Market Highlights
Economic Update
Mon, 23 Feb 2026 08:00 am
Malaysia External Trade - Cautious optimism amid fluid trade dynamics

Exports surged to a three-year high of +19.6% YoY in January (Dec: +10.2%), well above consensus, while imports moderated to +5.3% (Dec: +9.5%). The trade surplus narrowed slightly to RM21.4bn (Dec: RM22.1bn).

Manufacturing (+22.3% YoY; Dec: +13.4%) led the expansion, supported by an acceleration in E&E. Mining and agriculture provided further support to the overall growth.

We view the slowdown in capital goods imports (+2.3% YoY; Dec: +27.1%) as a temporary breather, with infrastructure rollout and data centre expansion keeping investment momentum firm in 2026.

The US Supreme Court ruling against Trump’s IEEPA tariffs is unlikely to materially alter the trade landscape, as the administration shifts toward alternative tariff pathways.

Trade momentum should remain supported by steady global growth and semiconductor demand, although tariff risks, geopolitical tensions and a firmer ringgit could pose headwinds. We maintain our 2026 export growth forecast at +4.8% (2025: +6.4%), pending greater clarity on tariff developments.

Economic Update
Fri, 20 Feb 2026 07:41 am
Malaysia Inflation Rate - Firmer demand outlook to drive 2026 inflation    

Malaysia’s headline inflation held at +1.6% YoY in January 2026 (Dec-25: +1.6%), in line with Bloomberg consensus, as lower fuel prices were offset by a smaller electricity rebate.

Core inflation printed +2.3% YoY (Dec: +2.3%), holding at its highest level since October 2023, consistent with our view that resilient domestic demand will cushion against a still-fluid external backdrop in 2026.

Going forward, we expect a modest pickup in demand-pull price pressures, while cost-push price pressures should remain contained.

We maintain our forecast for inflation to rise modestly to +1.8% YoY in 2026 (2025: +1.4%).

The steady January inflation print, alongside improving growth momentum, reinforces our expectation for BNM to keep the OPR at 2.75% throughout 2026.

Economic Update
Mon, 16 Feb 2026 07:46 am
Malaysia 4Q25 GDP - Firmer trajectory lifts 2026 outlook

• Malaysia’s GDP accelerated to +6.3% YoY in 4Q25 (3Q25: +5.4%), surpassing the advance estimate of +5.7%. Growth was driven by stronger domestic demand, while net exports declined. Full-year 2025 GDP growth came in at +5.2% (2024: +5.1%).
• The current account recorded a surplus of 0.4% of GDP (3Q25: 2.5%), supported by goods and services surpluses. We project a modest current account surplus of 1.5% of GDP in 2026.
• Headline growth was partly boosted by inventory accumulation, which is unlikely to be sustained. That said, domestic demand should remain resilient, while the external sector will be the key swing factor in 2026.
• In view of the firmer growth momentum, we revise our 2026 GDP forecast higher to +4.7% YoY (previously +4.3%).
• We expect BNM to keep the OPR at 2.75% throughout 2026, barring a materially stronger growth outlook or a significant easing in external risks that could warrant a hike towards 3.00%.

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