The Ministry of Finance (MoF) expects Malaysia’s economy to expand at a moderate pace in 2026 amid heightened global trade uncertainties and weak external demand.
In the 2026 Pre-Budget Statement, ministry officials stated that growth will be underpinned by resilient domestic demand, particularly through private investment, stable employment, income-enhancing measures such as targeted cash transfers and wage increases.
The tourism sector, driven by Visit Malaysia 2026, is also set to contribute significantly to services growth.
In this context, Budget 2026 will prioritise strengthening domestic sources of growth, diversifying export markets and expanding household income opportunities.
Meanwhile, Malaysia’s GDP grew by 4.4% in the first quarter of 2025, driven by household consumption, investment and construction. Growth is expected to remain at around 4.5% in the second quarter.
The country's economy remains resilient with a forecast of 4.0% to 4.8% for 2025. Inflation eased to 1.1% in June, a 52-month low, while the unemployment rate fell to 3.0% in May.
New debt decreased from RM99.4 billion (2022) to RM92.6 billion (2023) and further decreased to RM76.8 billion in 2024.
On 6 August 2025, the ringgit emerged as one of Asia's best-performing currencies, rising 5.8% to RM4.2270 against the US dollar.
