
by GLORIA HARRY BEATTY
MALAYSIA’S economy expanded 5.4% in the first quarter of 2026, surpassing expectations despite heightened global uncertainty arising from the conflict in West Asia, according to the Ministry of Finance (MoF).
In a statement today, the ministry said the growth exceeded both the Department of Statistics Malaysia’s (DOSM) advance estimate and Bloomberg’s median forecast of 5.3%.
MoF said domestic demand grew 5.2% during the quarter, supported by household spending, a stronger labour market and higher disposable income following the second phase of the Public Service Remuneration System (SSPA), Bantuan Khas Kewangan (BKK) for civil servants and continued assistance under Sumbangan Asas Rahmah (SARA).
The ministry added that investments in artificial intelligence technologies and data centres remained strong due to facilitative policies and a conducive investment environment.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said the government’s focus on Ekonomi MADANI reforms and responsible fiscal management had continued strengthening the country’s economic momentum.
“This approach has helped Malaysia build on the 5.2% growth recorded in 2024 and 2025, to achieve 5.4% growth in the first quarter of 2026,” he said.
Anwar added that continued job creation had lowered the unemployment rate to 2.9%, the lowest level in a decade, while inflation remained moderate at 1.6% during the quarter.
The ministry said the government remains cautious over the impact of the West Asia conflict on global demand, supply chains and market stability, adding that a crisis management task force under the National Economic Action Council had been formalised to monitor developments and coordinate responses to emerging risks.
As of May 14, 2026, the government has announced RM15 billion in financing support for micro, small and medium enterprises (MSMEs) through microfinancing, business loans and guarantees.
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