Malaysia Economic Growth Expected to Reach Upper End of 5% Forecast

Malaysia economic growth is expected to remain near the upper end of the central bank’s 4% to 5% forecast range despite higher energy costs linked to conflict in the Middle East.

Bank Negara Malaysia Governor Abdul Rasheed Ghaffour said domestic momentum remained resilient and inflation was manageable, although global uncertainty and elevated fuel prices continued to create risks.

The central bank kept its benchmark interest rate unchanged at 2.75% in July for a sixth consecutive meeting, saying monetary policy remained consistent with the country’s growth and inflation outlook.

Headline inflation averaged 1.7% during the first five months of the year, while core inflation stood at 2.1%.

Malaysia has continued subsidising petrol and diesel to protect consumers and businesses from higher global energy prices.

Government spending on these subsidies could reach MYR40bn if fuel costs remain elevated, placing additional pressure on public finances while supporting household purchasing power.