HSBC Maintains Malaysia’s 2026 Growth Forecast at 4.5%, Sees Economy Remaining Resilient
PETALING JAYA, July 2 — HSBC has reaffirmed its forecast that Malaysia’s economy will expand by 4.5 per cent in 2026, citing resilient domestic fundamentals, manageable inflation and stable corporate earnings despite continued uncertainty in the global economy.
The bank said Malaysia remains well positioned to navigate external headwinds, supported by government subsidy measures, steady economic activity and the country’s role as a major exporter of natural gas.
HSBC Asia Chief Investment Officer for Private Banking and Premier Wealth, Desmond Kuang, said Malaysia’s gross domestic product (GDP) grew 5.4 per cent year-on-year during the first quarter of 2026 after recording growth of more than 6.0 per cent in the final quarter of 2025.
He said the moderation should be viewed as a return to more sustainable growth rather than a sign of weakening economic momentum.
“The slower pace of expansion reflects normalisation following an exceptionally strong previous quarter rather than a deterioration in Malaysia’s economic outlook,” he said in a statement.
According to HSBC, domestic inflation is expected to remain relatively contained, with fuel subsidy mechanisms helping cushion consumers from significant price increases despite volatility in global energy markets.
Kuang noted that geopolitical tensions in the Middle East have also highlighted Malaysia’s relative strength within the regional energy landscape.
Although Malaysia remains a net importer of crude oil, he said the country is a significant exporter of natural gas, providing an additional source of resilience during periods of elevated energy prices.
HSBC believes Malaysia’s combination of stable corporate profitability and resilient economic growth continues to provide support for the domestic equity market.
Given the current balance of risks and opportunities, the bank said it is maintaining a neutral investment stance on Malaysian equities.
Meanwhile, HSBC Global Chief Investment Officer for Private Banking and Premier Wealth, Willem Sels, said artificial intelligence (AI), energy and security-related industries are expected to become the primary drivers of the next phase of global investment.
He said increasing geopolitical competition and heightened national security priorities are accelerating demand for long-term investment, supportive public policies and deeper capital market participation.
Sels added that private capital is expected to play a more significant role in financing future investment requirements as governments and businesses seek new funding sources.
In HSBC’s Third Quarter 2026 Investment Outlook, the bank continues to express confidence in the resilience of the global economy while acknowledging that financial markets are likely to remain volatile as investors respond to rapidly evolving economic and geopolitical developments.
He advised investors to maintain diversified and resilient portfolios capable of weathering short-term market fluctuations while remaining positioned to benefit from long-term structural growth trends emerging across the global economy.
![Woman in a light blue gown with gold embroidery and a silver halo headpiece, posing gracefully.", "Two side-by-side portraits of a woman in an ornate hijab dress with beaded sleeves and a metallic halo.", "Elegant blue gown with sparkling embellishments and a crown-like silver halo worn by a hijab-clad model.", "Portraits of a woman in a richly decorated blue dress with tassels and a radiant silver halo.", "Hijab-clad model wearing a beaded blue gown with a jeweled crown-like headpiece, posing confidently."]} }aissez?{](https://wilayah.com.my/wp-content/uploads/2026/07/siti-nurhaliza-2-390x220.jpg "siti nurhaliza 2 - Wilayah.com.my")
