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Market Highlights
Economic Update
Mon, 14 Sep 2026 07:24 am
Malaysia Labour Market - Steady outlook but wary of cost pressures on hiring  

• The unemployment rate held at 3.0% in July, reflecting stable labour market conditions.
• Labour market outlook remains intact, underpinned by strength in household consumption, investment and external demand.
• We remain wary of the impact of elevated cost pressures and an uncertain business operating environment on hiring momentum.
• We maintain our unemployment rate forecast of 3.0% in 2026 (2025: 3.0%).

Economic Update
Thu, 10 Sep 2026 07:19 am
Malaysia Industrial Production - Resilience amid headwinds        

• The Industrial Production Index (IPI) moderated to +4.7% YoY in July (Jun: +6.5%), below consensus of +5.6%, led by a sharp decline in mining.
• The AI-driven tech upcycle supports our broad optimism on the manufacturing outlook.
• We expect manufacturing activity to remain relatively firm in 2H26, ruling out a sharp deterioration at this juncture.
• Key downsides include a high base effect from last year, elevated producer cost pressure, uncertain US trade policy and haze conditions.
• We keep our 2026 manufacturing growth forecast at +6.2% YoY (YTD: +6.5%; 2025: +4.5%).

Economic Update
Fri, 04 Sep 2026 07:32 am
BNM MPC Meeting - Prospect of a 25-bp rate hike in 2027    

• BNM maintained the OPR at 2.75% at its September MPC meeting, in line with our view.
• The policy tone remained positive, with 2027 growth driven by the external sector.
• BNM flagged the limited spillover of external sector strength to wages, underscoring its caution over modest domestic demand despite strong headline economic growth.
• We see the removal of the word “appropriate” from the MPS closing paragraph as a shift towards a mildly hawkish stance.
• We expect the OPR to stay on hold at 2.75% in 2026, followed by a 25-bp hike in 2027.

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