IMF Raises Malaysia’s Real GDP Growth Forecast To 4.3 Pct for 2026, 2027

KUALA LUMPUR, Jan 20 (Bernama) — The International Monetary Fund (IMF) has raised its projection for Malaysia's real gross domestic product (GDP) growth to 4.3 per cent for both 2026 and 2027, representing an upward revision of 0.3 percentage points.

According to its January 2026 World Economic Outlook (WEO) update released on Tuesday, “Global Economy: Steady amid Divergent Forces”, the IMF also estimated Malaysia’s real GDP growth at 4.6 per cent in 2025, compared to 5.1 per cent growth in 2024.

The IMF previously set Malaysia's 2025 GDP at 4.5 per cent and 4.0 per cent in 2026.

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The report stated that global growth is projected to remain resilient at 3.3 per cent in 2026 and at 3.2 per cent in 2027: rates similar to the estimated 3.3 per cent outturn in 2025.

The forecast marks a small upward revision for 2026 and no change for 2027 compared with that in the October 2025 WEO.

“This steady performance on the surface results from the balancing of divergent forces. Headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology, including artificial intelligence (AI), more so in North America and Asia than in other regions, as well as fiscal and monetary support, broadly accommodative financial conditions, and adaptability of the private sector,” it said.

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The IMF said global headline inflation is expected to decline from an estimated 4.1 per cent in 2025 to 3.8 per cent in 2026 and further to 3.4 per cent in 2027.

The inflation projections are also broadly unchanged from those in October and envisage inflation returning to target more gradually in the United States than in other large economies.

“The risks to the outlook remain tilted to the downside. The re-evaluation of productivity growth expectations about AI could lead to a decline in investment and trigger an abrupt financial market correction, spreading from AI-linked companies to other segments and eroding household wealth. Trade tensions could flare up, prolonging uncertainty and weighing more heavily on activity,” it said.

Meanwhile, on the upside, the IMF said activity could be further lifted by AI-related investment and eventually transform into sustainable growth if faster AI adoption translates into strong productivity gains and increased business dynamism.  “Activity could also be supported by a sustained easing in trade tensions. Policies to foster stability and sustainably lift medium-term growth prospects require a keen focus on restoring fiscal buffers, preserving price and financial stability, reducing uncertainty, and implementing structural reforms without further delay,” it said. 

— BERNAMA