Key facts
- Malaysia's economy grew 6.0% in the second quarter.
- This growth rate surpassed economists' expectations.
- Strong exports, especially in semiconductors and AI-related equipment, were a key driver.
- Domestic demand remained resilient, supported by employment and fiscal measures.
- The central bank anticipates 4%-5% GDP growth for the full year.
Malaysia's economy experienced a significant acceleration in the second quarter, with gross domestic product (GDP) growing by 6.0%, surpassing earlier forecasts. This robust performance was primarily driven by strong export growth, particularly in semiconductors and AI-related equipment, and resilient domestic demand supported by employment and fiscal measures.
According to a Reuters poll of 21 economists, the growth was expected to reach 5.8%, an increase from the 5.4% recorded in the first quarter. Exports saw a notable surge of 45.4% in June, contributing to a trade surplus of 14.9 billion ringgit. Analysts attribute this strength partly to the burgeoning data center market in Southeast Asia, attracting U.S. and European technology firms diversifying their manufacturing bases.
Economists like Qi Hang Tay of Economist Intelligence Unit highlighted the impact of AI adoption on data center capacity and demand for related equipment. Meekita Gupta of Pantheon Macroeconomics noted that AI-related demand shows no immediate signs of slowing down. The central bank, Bank Negara Malaysia, has maintained its benchmark interest rate at 2.75% since July 2025 and anticipates it will remain unchanged through 2027. Despite global uncertainties, including the Middle East conflict, the central bank governor projected Malaysia's economy to grow between 4% and 5% for the full year.