Malaysia’s real GDP growth forecast to 4.3% in 2026, 2027: IMF

The International Monetary Fund has upped Malaysia’s real gross domestic product (GDP growth by 0.3 percentage points to 4.3% for 2026 and 2027.

IMF also estimated Malaysia’s real GDP growth at 4.6% in 2025 compared to 5.1% in 2024, according to its January 2026 World Economic Outlook update.

The report, “Global Economy: Steady Amid Divergent Forces”, said global growth was projected to remain resilient at 3.3% in 2026 and 3.2% in 2027, similar to the estimated 3.3% outturn in 2025.

The forecast marks a small upward revision for 2026 and no change for 2027 from the figures given 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.

The global headline inflation was expected to decline from an estimated 4.1% in 2025 to 3.8% in 2026 and further to 3.4% in 2027.

The inflation projections are broadly unchanged from those in October and envisage inflation returning to target more gradually in the US 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.

“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.