Malaysian economy on track for 4 to 5% growth, central bank governor says

[KUALA LUMPUR] Malaysia’s economy is on track to grow by between 4 per cent and 5 per cent in 2026 despite the global energy supply shock from the Middle East conflict, its central bank governor said at a forum on Tuesday (Jul 28).

Economic growth will likely be towards the upper end of the forecast range as inflation remains manageable, Bank Negara Malaysia (BNM) governor Abdul Rasheed Ghaffour said.

The central bank will continue to play its part in maintaining price stability as global uncertainties persist and energy prices remain high, he said.

BNM’s policy stance remains in line with the domestic growth and inflation outlook, Abdul Rasheed added.

BNM left its key interest rate unchanged at 2.75 per cent for the sixth straight policy meeting in July.

Headline and core inflation averaged 1.7 per cent and 2.1 per cent, respectively, over the first five months of 2026.

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Although energy prices have soared, the government has maintained subsidies for fuel and diesel.

The government may spend up to 40 billion ringgit (US$9.8 billion) on fuel subsidies in 2026, more than double its initial budget allocation, if energy prices remain elevated. REUTERS