Who Reported Malaysia's Q1 2026 GDP and What Did It Show?

Malaysia's advance GDP estimates recorded a growth of 5.3 per cent in the first quarter of 2026, compared to 6.3 per cent in the preceding quarter. The figures were released by the Department of Statistics Malaysia (DOSM).

Commenting on the data, Chief Statistician Mohd Uzir Mahidin said the country's economy declined 4.4% on a quarter-on-quarter basis, reversing the 3.3% growth registered in Q4 2025.

The number still represents solid expansion by global standards, but the direction of travel matters as much as the figure itself.

What Sectors Drove Growth and Which Ones Dragged It Down?

The economic performance was supported by expansion in the Services, Manufacturing, Construction, and Agriculture sectors. Nevertheless, the Mining and quarrying sector registered a decline during this quarter.

The services sector continued to anchor overall GDP expansion, registering 5.4% growth, attributed mainly to growth in the wholesale and retail trade sub-sector, reflecting sustained consumer spending supported by a stable labour market, higher household income, and ongoing people-centred initiatives. The information and communication sub-sector also contributed, supported by rising demand for data centre and generative AI-related activities.

The Manufacturing sector grew by 5.8 per cent, lower than the 6.1 per cent growth in the preceding quarter. The Construction sector grew at a slower pace of 7.8 per cent in Q1 2026, against 11.0% in Q4 2025. The Agriculture sector registered a growth of 2.8 per cent, moderating from 5.4 per cent in Q4 2025.

Mining and quarrying contracted at negative 1.1%, primarily due to lower production of crude oil, condensate, and natural gas.

Who Is Warning About Global Risks to Malaysia's Economy?

Bank Negara Malaysia said uncertainties surrounding the duration and severity of the West Asia conflict will affect the outlook for domestic growth and inflation going forward. Nevertheless, the central bank said Malaysia's strong fundamentals will continue to underpin the economy's resilience, while employment, wage growth, and policy measures will remain supportive of household spending.

DOSM also warned of downside risks including policy uncertainty, financial market volatility, and escalating trade tensions among major economies, which could affect open economies such as Malaysia through trade and financial linkages.

What Did Investment Banks Say About the 5.3% Growth Figure?

Kenanga Investment Bank said the growth figure came in above its internal forecast of 4.7%, but slightly below Bloomberg consensus expectations of 5.5%. Kenanga maintained its full-year GDP growth forecast at 4.5% for 2026, with potential upside to 5.0% if geopolitical conditions stabilise and economic momentum strengthens.

Bank Negara Malaysia previously estimated Malaysia's economy will grow between 4 per cent and 5 per cent in 2026, with the country's domestic resilience and diversified export structure continuing to provide a buffer against external headwinds.