Malaysia economy grows 5.8% as exports surge

Photo courtesy of Malay Mail

Malaysia’s economy expanded by 5.8 per cent in the second quarter of 2026, up from 5.4 per cent in the previous quarter, supported by stronger services and manufacturing activity.

The Department of Statistics Malaysia said first-half growth reached 5.6 per cent compared with 4.5 per cent during the same period last year. Mining and quarrying recovered, construction continued to expand, while agriculture contracted because of lower palm-oil and fisheries production.

Manufacturing and trade record strong gains

The Industrial Production Index increased by 8.4 per cent in May. Manufacturing rose 6.6 per cent, mining grew 19.8 per cent and electricity expanded 4.2 per cent.

Manufacturing sales reached RM172.7 billion, an 8.9 per cent year-on-year increase. Electrical and electronics products were a major contributor, with that subsector recording growth of 26.4 per cent.

Wholesale and retail sales climbed 11 per cent to RM171.3 billion. Wholesale trade rose 18.4 per cent to RM80.8 billion.

Exports widen Malaysia’s trade surplus

Total trade increased 29.8 per cent year-on-year to RM327.6 billion in May. Exports jumped 45.3 per cent to RM184 billion, while imports rose 14.1 per cent to RM143.6 billion. The resulting trade surplus widened to RM40.4 billion.

Momentum continued in June, when total trade grew 44.7 per cent to RM340.9 billion. Inflation eased from 2 per cent in May to 1.9 per cent in June.

The unemployment rate remained at 3 per cent in May. Employment edged up to 16.82 million people and the labour-force participation rate stood at 70.9 per cent.

What it means for foreigners in Malaysia

For expatriates and foreign businesses, the figures point to continued commercial activity and a stable labour market. Strong electronics exports may support investment and employment in Malaysia’s manufacturing centres.

Households should note that growth does not remove cost pressures. Inflation remained modest overall, but prices increased in areas including food, housing, utilities, recreation and communications. Foreign residents should continue to assess changes in everyday costs rather than relying solely on the headline growth figure.

31 July 2026