MALAYSIA'S ECONOMY TO STAY RESILIENT IN 2026, OPR REMAINS UNCHANGED -- ANALYSTS

KUALA LUMPUR, Jan 22 (Bernama) -- Malaysia’s economic growth is expected to remain resilient in 2026, supported by robust domestic demand and manageable inflation, leading analysts to expect Bank Negara Malaysia (BNM) to keep the Overnight Policy Rate (OPR) unchanged at 2.75 per cent throughout the year. 

Kenanga Investment Bank Bhd (Kenanga IB) opined that the current OPR level would continue to balance support for domestic activity and price stability. 

“Policymakers are likely to stay cautious as they monitor United States policy development, tariff-related effects, pass-through effects of subsidy rationalisation and wage measures on inflation and growth outlook. 

“A status quo remains the most likely path, barring a major global shock or sharp deterioration in external conditions,” said the investment bank in a note today.

Kenanga IB maintains a modest 4.5 per cent growth projection for the domestic economy in 2026. 

Meanwhile, MBSB Investment Bank Bhd (MBSB IB) predicts Malaysia’s economy to grow at 4.3 per cent in 2026, underpinned by robust domestic demand. 

It also expects an extended OPR pause this year, supported by steady economic growth and well-contained inflation. 

It said that recent advance estimates for the fourth quarter of 2025 (4Q 2025) showed a strong year-on-year (y-o-y) pickup of 5.7 per cent, signalling that Malaysia’s economic momentum is on the rise. 

“On the price outlook, we anticipate a potential uptick in inflation to 1.8 per cent in 2026, driven by policy-related pressures and potentially higher non-food inflation. 

“Additionally, higher disposable income from salary adjustments and government transfers could support demand-pull inflation,” said MBSB IB. 

HSBC Global Investment Research said private consumption remains healthy, with even upside risks after the RON95 petrol price was lowered to MYR1.99 per litre since Sept 30, 2025. 

Additionally, it said the Visit Malaysia 2026 campaign is expected to boost tourist spending, aiming to attract 47 million tourists. 

“Elsewhere, the investment boom continues, thanks to consistent foreign direct investment (FDI) inflows and a push for infrastructure projects. 

“Two key projects that will be completed this year are the East Coast Rail Link (ECRL) and the Rapid Transit System (RTS) linking Johor Bahru and Singapore,” it said.

HSBC Global Investment Research also expects GDP growth to hit 4.5 per cent this year, at the upper end of the government’s forecast of 4-4.5 per cent.

-- BERNAMA