Malaysia revises Q1 growth up to 5.4% as AI boom and household spending offset energy shock

[KUALA LUMPUR] Malaysia’s economy grew faster than initially estimated in the first quarter as resilient household spending and the artificial-intelligence boom outweighed the impact of the global energy shock.

Gross domestic product rose 5.4 per cent from the year before, according to Bank Negara Malaysia (BNM) and the Department of Statistics Malaysia on Friday (May 15), beating an advance estimate of 5.3 per cent released last month. The median forecast of economists was for no revision. Fourth-quarter 2025 growth was revised down to 6.2 per cent from 6.3 per cent.

“Higher energy prices, supply chain disruptions, and heightened uncertainty are expected to weigh on the external environment,” BNM governor Abdul Rasheed Ghaffour said in a briefing. “Nevertheless, the Malaysian economy is expected to remain resilient in 2026, with growth expected to come in within the range of 4 to 5 per cent, supported by steady domestic demand and continued expansion in our export performance.”

Rasheed said the current benchmark interest rate is appropriate, adding the central bank will continue to be vigilant as events evolve. BNM held the key rate at 2.75 per cent last week, saying Malaysia’s fundamentals should underpin its resilience to the Iran war, while the impact on inflation should be contained.

Malaysian consumers have continued spending in 2026, and the country is among a handful of Asian economies, including Singapore and Taiwan, which have been lifted by the sustained global frenzy for AI-related electronics and services. That has given the nation a crucial buffer in the face of the US war on Iran, while neighbours like the Philippines contend with high prices and slowing activity due to oil supply disruptions. BLOOMBERG