KUCHING: Malaysia\u2019s Gross Domestic Product (GDP) growth is expected to be in the region of 4.3 per cent in 2026, compared with 4.6 per cent last year.<\/p>\n
AFFIN Group\u2019s Chief Economist, Alan Tan, said Malaysia is heading into 2026 in a position of strength, but the outlook remains optimistic and cautious due to the United States (US) policy, especially tariffs.<\/p>\n
He said Malaysia\u2019s exposure to external demand means changes in the US and China can flow quickly into trade performance.<\/p>\n
\u201cMalaysia being a very open economy, we know we are very highly reliant on external demand. Whatever happens to the US economy, to the China economy, would have negative implications on Malaysia\u2019s trade,\u201d he said during the AFFIN Group Market Outlook and Chinese New Year Celebration Dinner 2026 at Sheraton Hotel here recently.<\/p>\n
Tan said domestic demand is expected to cushion the economy if exports soften.<\/p>\n
\u201cThe country\u2019s domestic demand is expected to cushion any unexpected export slowdown,\u201d he said.<\/p>\n
He said inflation is expected to stay manageable this year.<\/p>\n
\u201cOn the inflation front, we think inflation is likely to remain manageable at 1.7 per cent this year,\u201d he said.<\/p>\n
Tan said Bank Negara Malaysia is expected to keep the Overnight Policy Rate (OPR) unchanged.<\/p>\n
\u201cOur expectation is that Bank Negara is likely to maintain OPR at the current 2.75 per cent,\u201d he said.<\/p>\n
He said the global rate cycle is turning, with overseas central banks cutting while Malaysia holds.<\/p>\n
\u201cMajor countries in the US, European and central banks are all cutting interest rates,\u201d he reiterated.<\/p>\n
\u201cThe expectation going forward would be one where the US would continue to cut rates, cut interest rates, where Malaysia holds rates at the current level.\u201d<\/p>\n
He said the ringgit\u2019s direction would be shaped by the narrowing gap between US and Malaysian interest rates.<\/p>\n
\u201cThe narrowing of interest differential between the US rate and the Malaysian rate would favour the ringgit,\u201d he opined.<\/p>\n
\u201cIt will likely hover around the 4 to 4.05, possibly ending the year at 4.05.\u201d<\/p>\n
Tan said the US Federal Reserve may only cut rates twice in 2026, which would shape the pace of any appreciation.<\/p>\n
\u201cThe US Federal Reserve may only cut interest rates two times in 2026,\u201d he said.<\/p>\n
He said the ringgit could still see swings during the year.<\/p>\n
\u201cIn between, you may see ringgit fluctuating and even breaking the RM4 mark,\u201d he opined.<\/p>\n","protected":false},"excerpt":{"rendered":"KUCHING: Malaysia\u2019s Gross Domestic Product (GDP) growth is expected to be in the region of 4.3 per cent…\n","protected":false},"author":2,"featured_media":237406,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":{"0":"post-237405","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-new-zealand","11":"tag-newzealand","12":"tag-nz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/237405","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=237405"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/237405\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/237406"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=237405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=237405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=237405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}