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Market Highlights
Economic Update
Mon, 12 Jan 2026 07:58 am
Malaysia Labour Market - Positive conditions supportive of growth outlook

The labour market remained resilient in November, with the unemployment rate easing further to an 11-year low of 2.9%.

Services should remain a key anchor for employment in 2026, supported by resilient consumption, Visit Malaysia 2026 and sustained investment flows.

Easing tariff concerns and steady global semiconductor demand provide further tailwinds for manufacturing, supporting continued hiring in the sector.

We maintain our unemployment forecasts at 3.0% for 2025 (11M25: 3.0%; 2024: 3.2%) and 3.1% for 2026.

Accordingly, we keep our GDP growth projections at +4.7% YoY for 2025 and a more moderate +4.3% for 2026 amid lingering external uncertainties.

Economic Update
Mon, 12 Jan 2026 07:56 am
Malaysia Industrial Production - Cautious optimism over 2026 outlook

• The Industrial Production Index (IPI) moderated to +4.3% YoY in November (Oct: +6.0%), below market expectations of +5.3%, driven by softer manufacturing and mining output.
• Manufacturing moderation was broad-based across both export- and domestic-oriented clusters, but E&E production remains firm at +10.8% YoY.
• The AI-led technology upcycle remains a key growth anchor, with a potentially favourable US Supreme Court tariff ruling providing upside, while the unwinding of front-loaded demand, potential US semiconductor tariffs and geopolitical risks could weigh on the 2026 outlook.
• We maintain our full-year 2025 GDP growth forecast at +4.7% YoY, before moderating to +4.3% in 2026 amid evolving global trade and geopolitical risks.

Economic Update
Tue, 23 Dec 2025 07:48 am
Malaysia Inflation Rate - Modest inflation to persist into 2026

Headline inflation edged up to +1.4% YoY in November (Oct: +1.3%), slightly below consensus of +1.5%, underscoring the benign inflation backdrop.  

Core inflation held at a solid +2.2% YoY (Oct: +2.2%), supporting our view that domestic demand strength will carry into next year amid a volatile external environment. 

We maintain our full-year 2025 inflation forecast at +1.4% YoY, in line with the +1.4% average in 11M25.    

Given the muted policy pass-through from the SST expansion, we revise our 2026 inflation forecast lower to +1.8% YoY (previously +2.0%), implying only a modest pickup next year.

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