ECONOMY / KEY INFRASTRUCTURE UPDATES​

• Malaysia’s economy grew strongly by 6.3% in 4Q 2025 (4Q 2024: 4.9%), supported by robust domestic demand, sustained investment activity, continued demand for E&E exports, and a rebound in tourism. This lifted full-year GDP growth in 2025 to 5.2%, exceeding the Bank Negara Malaysia forecast of 4.0% to 4.8%. 
• The GDP growth in 2026 is expected to remain resilient at 4.0% to 4.5%, supported by strong domestic demand, steady E&E exports, and higher inbound tourism despite global trade and tariff pressures.
• The headline inflation rate moderated to 1.3% in 4Q 2025 (4Q 2024: 1.8%), supported by easing global cost pressures and targeted domestic price stabilisation measures, bringing the full-year 2025 inflation rate to 1.4%.
• In 2026, the headline inflation is projected at 1.3% to 2.0%, remaining contained amid easing cost pressures and stable domestic conditions, despite external uncertainties.
• The labour market continues to improve in 4Q 2025, with the unemployment rate dropping to 2.9% (4Q 2024: 3.2%), the lowest post-pandemic level.
• The Overnight Policy Rate (OPR) is expected to remain unchanged at 2.75% in 2026, supported by steady GDP growth prospects, manageable inflation, and an improving labour market.
• The upcoming carbon tax in 2026 may increase construction and operating costs, while boosting demand for green buildings.
• Global trade volatility and geopolitical uncertainties remain potential downside risks to the economic outlook.