APAC Economic Perspectives: Malaysia: Resilience in the run-up to GE16

Research evidence excerpt

APAC Economic Perspectives: Malaysia: Resilience in the run-up to GE16

Global Research

9 July 2026ab

APAC Economic Perspectives Economics

MalaysiaMalaysia: Resilience in the run-up to GE16

Grace Lim

Economist

Strong fundamentals, room for targeted fiscal support grace-k.lim@ubs.com

+65-6495 5965

Although the next general election is not due until early 2028, Malaysia is increasingly

entering the pre-election phase of the cycle. While investor attention remains focused Claire Long

Economiston cost-of-living pressures, subsidy costs and oil-price risks, the macro backdrop remains

claire.long@ubs.com

resilient. Growth has become more balanced across consumption, investment and +65 6495 7426

exports, while the investment cycle is increasingly supported by structural drivers. MYR

resilience should remain despite broad USD strength, supported by steady growth, a Nicole Goh

Analyst

current account surplus and ongoing repatriation efforts. Inflation has been benign,

nicole.goh@ubs.com

with few signs of broadening, even as BNM has retained a mildly hawkish bias amidst +603-2781 1133

resilient growth and upside inflation risks. With macroeconomic constraints unlikely to

become binding ahead of GE16, policy attention is likely to shift towards distributional Rohit Arora

Strategist

outcomes, household incomes and the quality of growth, with scope for modest fiscal

rohit-b.arora@ubs.com

redistribution, most likely through targeted transfers. (See Malaysia Market Strategy +65-6495 5232

"Poll positioning")

Teck Quan Koh

Growth is more balanced between external and domestic drivers

teck-quan.koh@ubs.com

We revise up our 2026 growth forecast slightly to 4.7% (Prev: 4.5%), on the back of a +65-6495 4416

pickup in Q2 indicators such as industrial production and exports.