Kuala Lumpur, – Malaysia’s economy grew by 5.3 percent year-on-year in the first quarter of 2026 (Q1 2026), according to the advance estimates released by the Department of Statistics Malaysia (DOSM).
The growth was slower compared to the 6.3 percent recorded in the fourth quarter of 2025, but is still considered solid given rising global geopolitical uncertainties, including escalating tensions in the Middle East that have pushed oil prices higher.
Chief Statistician Malaysia, Datuk Seri Mohd Uzir Mahidin, said the first-quarter data shows the country’s economy remains fundamentally resilient despite external challenges.
Key Sector Breakdown:
- Services expanded by 5.4% (from 6.3% in the previous quarter), supported mainly by wholesale and retail trade, information and communication, as well as transportation and storage. Growth was driven by sustained consumer spending, a stable labour market, and higher household income.
- Manufacturing grew 5.8% (from 6.1%), supported by electrical, electronic and optical products, vegetable and animal oils and fats processing, as well as non-metallic mineral products, basic metals and fabricated metal products.
- Construction expanded by 7.8% (from 11.0% previously).
- Agriculture increased by 2.8% (from 5.4%), driven by oil palm and livestock, although rubber and fishing recorded declines.
- Mining & Quarrying contracted by 1.1% (from +2.0% in the previous quarter) due to lower production of crude oil, condensate, and natural gas.
Overall, growth remained broad-based across almost all major sectors, although momentum moderated compared to the previous quarter.
Outlook for 2026
The 5.3% growth in Q1 provides a strong foundation for Malaysia’s economy throughout the year. Bank Negara Malaysia recently revised its full-year 2026 growth forecast upward to between 4.0% and 5.0%.
Despite global headwinds, Malaysia’s economy is expected to continue being supported by robust domestic demand, particularly from the services sector and export-oriented manufacturing.
