UOB maintains Malaysia’s 2026 GDP forecast at 4.5% despite rising external risks and steady monetary policy.
Malaysia’s economy expanded 5.4% year-on-year in the first quarter of 2026, slightly above estimates but decelerating from 4Q25. Domestic demand and services drove growth, though intensifying external headwinds, including the Middle East conflict, pose downside risks.
UOB retains its 2026 GDP growth projection at 4.5%, within Bank Negara Malaysia’s 4.0%–5.0% range, down from 5.2% in 2025. The central bank is expected to keep the Overnight Policy Rate unchanged at 2.75% until clearer economic shifts emerge.
Analysts anticipate BNM will monitor conditions over the next two to three months before considering policy adjustments. Government measures to support households and businesses may be expanded as risks evolve.