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Market Highlights
Economic Update
Tue, 18 Aug 2026 06:37 am
Malaysia Inflation Rate - Benign inflation supports steady OPR outlook

• Malaysia’s headline inflation eased to +1.8% YoY in July (Jun: +1.9%), marginally below consensus of +1.9%, driven mainly by easing transport costs.
• Core inflation eased to a one-year low of +1.8% YoY (Jun: +1.9%), pointing to subdued underlying price pressures.
• We maintain our 2026 and 2027 inflation forecasts at +2.0% YoY, with upside to price pressures from lagged passthrough of higher business costs, volatility in crude oil prices and El Niño impacts on food prices.
• The still-benign inflation outlook supports our expectation for BNM to keep the OPR on hold at 2.75% through 2026.

Economic Update
Mon, 17 Aug 2026 06:58 am
Malaysia 2Q26 GDP - Still going strong, but risks loom      

• Malaysia’s GDP expanded by +6.0% YoY in 2Q26 (1Q26: +5.4%), exceeding the advance estimate of +5.8%, driven by a surge in net exports.
• Given the robust current account performance in 1H26, we raise our 2026 current account surplus projection to +2.0% of GDP (previously +1.5%).
• We maintain our 2026 GDP growth forecast at +5.0% YoY, with the balance of risks tilted to the upside following the stronger-than-expected 2Q26 growth.
• Our 2026 GDP forecast implies growth moderating to +4.4% in 2H26, reflecting an unfavourable base effect and rising headwinds.
• We believe BNM will likely assess the rising headwinds in 2H26, keeping the OPR on hold at 2.75% through 2026.

Economic Update
Wed, 12 Aug 2026 07:10 am
Malaysia Industrial Production - Wary of headwinds in 2H26      

• The Industrial Production Index (IPI) rose +6.5% YoY in June (May: +8.5%), albeit below market expectations of +7.2%, led by firmer manufacturing output.
• Latest indicators suggest manufacturing momentum should remain firm in July.
• A moderation could become more pronounced towards year-end amid a high base and fading stockpiling support.
• Key risks include elevated production costs and potentially unfavourable US trade policy.
• We have revised our manufacturing growth forecast higher to +6.2% (previously: +4.5%).

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