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OCBC Group Research expects Malaysia’s economic growth to moderate to 3.8% year-on-year in 2026 from an estimated 4.8% in 2025, as the boost from front-loaded exports to the US fades and investment spending slows modestly.

“For Malaysia, we maintain our conservative 2026 GDP growth forecast of 3.8% y-o-y compared to 4.8% in 2025,” said OCBC chief economist and head of group research Selena Ling in the bank’s 2026 economic outlook.

The bank expects growth to ease gradually to 3.9% in the first half of 2026 and 3.8% in the second half.

OCBC said the moderation reflects “payback from front loading exports to the US through 2025” and more volatile export growth, particularly to the US, as tariff exemptions are clarified and the need to rush shipments diminishes.

It forecasts Malaysia’s goods export growth to slow to 2.2% in 2026 from 6.5% in 2025.

That said, the bank noted potential upside risks if momentum from the AI- and data-centre boom, which “has turbo-charged growth in 2025”, continues this year.

Johor, in particular, is expected to remain a key beneficiary of data-centre investments, supported by initiatives such as the Johor-Singapore Special Economic Zone.

On policy, OCBC expects fiscal support to remain targeted as the government presses ahead with consolidation, leaving room for monetary easing.

“We remain comfortable with our call for a 25bp rate cut from Bank Negara Malaysia in 1H26,” Ling said, though she cautioned that resilient growth could reduce the need for a cut.

On the currency, OCBC sees the ringgit’s outperformance against the US dollar in 2025 spilling into 2026, albeit with more modest gains.

The bank noted that constructive policymaker messaging, including earlier comments that the ringgit could trade “just below 4” against the US dollar by mid-2026, has helped to underpin positive sentiment, alongside support from the US Federal Reserve’s easing cycle, a steadier renminbi, and encouraging domestic fundamentals such as quality foreign direct investment inflows, a wider trade surplus and commitment to fiscal consolidation.

Looking beyond 2026, OCBC said structural reforms and progress on economic masterplans could lift Malaysia’s growth to 4.0%–4.5% in 2027–28, underpinned by resilient FDI and continued investor confidence. — TMR

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SHAH ALAM — The Selangor government recorded state revenue collection of RM3.021 billion in 2025, thus recording a consistent increase for five consecutive years, said Selangor Menteri Besar Datuk Seri Amirudin Shari (picture).

He said the historic achievement of surpassing the RM3 billion mark reflected the state’s strong and consistent financial performance, the results of effective governance and the high commitment of the entire state government administration machinery.

“This consistency achieved through revenue collection was the result of hard work, employees who work hard and also the creativity of the state government administration in obtaining new results for the state government,” he said when delivering his New Year’s Address at the Raja Muda Musa Hall, Selangor Youth and Culture Complex here today.

Amirudin added that in 2021, Selangor targeted an income of RM2.2 billion but managed to record a collection of RM2.28 billion and that momentum continued in 2022 when the target of RM2.05 billion was exceeded with a collection of RM2.53 billion, which was more than RM500 million over the target.

According to him, the performance continued in 2024 when the target of RM2.2 billion was successfully achieved with a collection of RM2.867 billion, while in 2025 the target of RM2.3 billion was recorded with a surplus of almost RM700 million, reaching RM3.021 billion.

However, 2023 revenue collection was not mentioned.

He also expressed his appreciation to the entire state administrative machinery including the Land and Mines Office (PTGS) and local authorities for successfully maintaining strong revenue collection performance.

Amirudin said Selangor continued to record encouraging investment performance as the state recorded total investments exceeding RM51 billion as at September 2025, among the highest in Malaysia.

He said although some states recorded large amounts of investments, Selangor remained the state that created the most job opportunities, thus proving the quality of the investments received.

“We do not only look at the amount of investments coming in, but also the number of job opportunities created, because up to September 2025, the investments recorded in Selangor have created almost 44,000 job opportunities, the highest compared to other states.

“The number is 43,998, compared to Kuala Lumpur’s 43,900, Penang’s 19,700 and Johor’s 14,492… this means that our investments are not just poor quality investments, we are not only absorbing and protecting those in need, but we are providing opportunities and creating life opportunities for the people living in this state,” he said.

Meanwhile, to identify the hardcore poor, Amirudin said the state government would monitor about 3,500 individuals every six months, including those facing job loss, health problems or income issues, with the involvement of relevant agencies such as the Social Welfare Department and zakat, to ensure that these groups continue to be assisted. — BERNAMA

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GEORGE TOWN — The Penang state government has announced that it has yet to make any decisions, including on zoning and location, for the proposed establishment of the Penang International Financial Centre (PIFC), despite ongoing discussions with key regulators.

Chief Minister Chow Kon Yeow (picture) said in a statement today that discussions with Bank Negara Malaysia, the Securities Commission Malaysia, and the Labuan Financial Services Authority (LFSA) aim to ensure that any proposal put forward is innovative, legally compliant, upholds high integrity, and is aligned with the national Financial Sector Blueprint.

He said the effort is also crucial to avoid any overlap with existing value chains within the country’s financial sector.

“Positioning Penang as a financial hub is a long-term aspiration to strengthen the state’s economic foundations within a broader framework, namely to develop Penang into a competitive and high-impact regional technology innovation hub.

“Although the federal government has yet to finalise a comprehensive framework for this initiative, the state government, through its think tank Penang Institute, remains committed to laying a strong foundation,” said Chow.

He also said engagement sessions with potential industry players will continue in phases and stages to build market confidence and assess the industry’s actual needs.

“Penang has unique strengths through its long-established ecosystem of high-technology industrial and manufacturing activities.

“As such, the state will focus on specialised financial segments such as digital assets, financial technology (fintech) and manufacturing-related financial services, including supply chain financing, trade, risk management and industrial innovation, as part of the direction for the establishment of the PIFC,” said Chow. — BERNAMA

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