KUALA LUMPUR— The International Monetary Fund (IMF) has raised its projection for Malaysia’s real gross domestic product (GDP) growth to 4.7% for 2026, an upward revision of 0.4 percentage points from its January 2026 forecast.
According to the IMF’s World Economic Outlook (WEO) report released today, Malaysia’s economy is expected to moderate to 4.3% growth in 2027.
Malaysia recorded a strong 5.2% GDP growth in 2025, driven by resilient domestic demand. The central bank, Bank Negara Malaysia (BNM), currently projects the country’s economic growth for 2026 to remain within the range of 4% to 5%, supported by strong domestic resilience and a diversified export structure that helps cushion external challenges, particularly from the ongoing conflict in West Asia.
Slower Global Economic Outlook
Globally, the IMF forecasts world economic growth at 3.1% in 2026 (down 0.2 percentage points from its January projection) and 3.2% in 2027. This is slower than the recent pace of around 3.4% recorded in 2024–2025 and well below the historical average of 3.7% from 2000 to 2019.
Growth in advanced economies is projected to slow to 1.8% in 2026 and 1.7% in 2027. Meanwhile, emerging market and developing economies are expected to expand by 3.9% in 2026 and 4.2% in 2027.
For emerging and developing Asia, growth is forecasted at 4.9% in 2026 and 4.8% in 2027, down from 5.5% in 2025.
Key Risks and Challenges
The IMF highlighted that the conflict in West Asia continues to exert downward pressure on global growth through higher energy and food prices, as well as currency depreciation in some commodity-importing countries. The impact is more pronounced on emerging market and developing economies.
Global headline inflation is expected to rise to 4.4% in 2026 (an upward revision of 0.7 percentage points) before easing to 3.7% in 2027. World trade volume growth is projected to slow sharply to 2.8% in 2026 before recovering to 3.8% in 2027.
Despite these external headwinds, Malaysia’s robust domestic demand and diversified exports are expected to continue supporting the country’s economic performance.
