Malaysia’s Economy Grows 5.8% in Q2 2026, Signalling Strong Economic Momentum
Malaysia’s economy continued to perform strongly in the second quarter of 2026, growing 5.8% compared to the same period last year. The latest advance estimates show the country’s growth exceeded expectations, improving from 5.4% recorded in the first quarter.
The stronger performance was mainly driven by manufacturing and mining, while the services and construction sectors also continued to support the economy. Agriculture was the only major sector to record a decline during the quarter.
Malaysia Manufacturing, Mining and Services Drive Growth
Manufacturing remained one of the biggest contributors to Malaysia’s economy, with growth accelerating to 7.5%, up from 5.9% in the previous quarter.
The increase was supported by stronger production across several industries, including:
- Electrical and electronic products
- Petroleum, chemical, rubber and plastic products
- Basic metals and fabricated metal products
- Non-metallic mineral products
The sector continues to play a major role in supporting exports and overall economic growth. Malaysia’s mining and quarrying sector made a strong comeback in the second quarter.
After contracting by 2.1% in the previous quarter, the sector expanded by 10.2%, helped by higher natural gas production. This turnaround provided another boost to the country’s economy.
The services sector grew 5.4%, with wholesale and retail trade, transport and storage, and information and communication remaining key drivers.
Malaysia Economy Expands 5.6% in First Half of 2026
Construction also posted healthy growth of 6.6%, although this was slightly slower than the 7.7% recorded in the first quarter. Growth was supported by non-residential building projects and specialized construction activities.
Together, these industries continue to provide a solid foundation for Malaysia’s economy. The agriculture sector was the only major industry to contract during the quarter, falling 3.7% after growing 2.6% in the previous quarter.
The weaker result was mainly due to lower output from the oil palm and fishing industries. For the first six months of 2026, Malaysia’s economy expanded by 5.6%, compared to 4.5% during the same period in 2025.
Quarter-on-quarter, the economy also grew 1.7%, recovering part of the decline recorded earlier in the year. The latest figures show Malaysia’s economic growth remains broad-based, with manufacturing, mining, services and construction continuing to support business activity and employment. While agriculture faced some challenges this quarter, the overall outlook for the economy remains positive heading into the second half of 2026.
