KUALA LUMPUR, May 15 (Xinhua) -- Malaysia's economy expanded 5.4 percent year-on-year in the first quarter of 2026, moderating from 6.3 percent in the previous quarter, driven by resilient domestic demand and sustained export growth, the central bank said Friday.
Household spending remained supported by favorable labor market conditions, low unemployment and targeted policy measures, Bank Negara Malaysia said in a statement.
Investment activity continued to expand, underpinned by the implementation of multi-year projects in both the private and public sectors, alongside a high realization rate of approved investments and the rollout of national master plans.
Exports also recorded strong growth, led mainly by continued expansion in electrical and electronics (E&E) shipments.
On a seasonally adjusted quarter-on-quarter basis, however, the economy contracted by 0.01 percent, compared with 1.4 percent growth in the fourth quarter of 2025, following the previous quarter's strong performance.
Bank Negara Governor Abdul Rasheed Ghaffour said the economy is expected to remain resilient this year, with growth projected in the range of 4 to 5 percent, supported by steady domestic demand and continued export expansion.
"As a small and open economy, Malaysia will inevitably face both direct and indirect impacts from the ongoing geopolitical conflict in the Middle East," he said, adding that higher energy prices, supply chain disruptions and heightened uncertainty could weigh on the external environment.
The central bank said resilient domestic demand, bolstered by firm labor market conditions, policy support, and sustained investment activity, would continue to cushion external headwinds.
Despite global uncertainties, export growth is expected to remain supported by the global technology upcycle, particularly in E&E products, reflecting Malaysia's role in global supply chains. Enditem
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