Malaysia: Malaysia's economy is expected to grow between 4.0 and 4.8 per cent this year and between 4.0 and 4.5 per cent in 2026, according to Prime Minister Datuk Seri Anwar Ibrahim. In the preface for the Economic Outlook 2026 released by the Ministry of Finance today, Anwar, who is also Finance Minister, said the economy expanded by 4.4 per cent in the first half of 2025, outpacing many peers equally burdened by tariff shocks.
According to BERNAMA News Agency, Anwar emphasized the broad-based nature of this growth, noting that household spending remains strong, investment is rising in both public and private sectors, tourism is booming, and construction is active. He highlighted that unemployment is at its lowest in a decade, inflation is low, and the ringgit is resilient. Despite a weakened global trading environment, Malaysian exporters are adapting well.
Anwar also stated that Malaysia must not take the path of least resistance amid global challenges, as the people desire genuine reform and effective governance. He stressed the government's commitment to balancing external risks while addressing structural issues through the MADANI Economy framework. The administration aims to restore dignity, uplift quality of life, and ensure fair progress for all Malaysians.
Regarding Budget 2026, Anwar noted it is the fourth installment of the MADANI Budget series and the first under the 13th Malaysia Plan (2026 - 2030), marking a shift from reform to transformation. The budget aims for immediate recovery and long-term renewal, with strategic investments aligned with MADANI Economy's goals of raising national potential and living standards.
Anwar stated that the 13MP will help Malaysia expand expertise in high-growth sectors like AI and renewable energy, positioning the nation at the technological frontier while ensuring sustainability. As Malaysia prepares for Visit Malaysia 2026 and concludes its ASEAN Chairmanship, the country aims to be a regional bridge-builder and advocate for sustainable growth.
The Economic Outlook 2026 report reveals Malaysia's significant competitiveness improvement since 2024, rising 11 places to 23rd in the 2025 IMD World Competitiveness Ranking. The report emphasizes trade diversification, R and D and commercialization, enhanced governance, and digital readiness to reach the top 12 by 2033.
In human development, Malaysia's HDI score rose to 0.819 in 2025, ranking 67th globally. Continued investment in healthcare, education, and reduced inequality are deemed critical for positioning Malaysia within the top 25 HDI group.
The report also highlighted that in 2024, the share of compensation of employees was 33.6 per cent, below the 45 per cent target. Initiatives like the Progressive Wage Policy and skills upgrading aim to drive productivity growth. Women's labor market participation increased from 56.2 per cent in 2023 to 56.5 per cent in 2024, with goals to reach 60 per cent through affordable childcare, flexible work, and upskilling programs.
Meanwhile, Malaysia's Corruption Perception Index ranking remained at 57th in 2024 with a score of 50. To achieve a top 25 CPI position by 2033, the country needs a score between 68 and 70, as outlined in the National Anti-Corruption Strategy (2024 - 2028).