Malaysia Steps Into a New Cycle of Growth in 2026
A positive shift from recovery to expansion is emerging, with investment momentum and policy clarity setting the stage for 2026.
CGS International Securities Malaysia signals a transition from market recovery to growth heading into 2026, citing stabilising global trade dynamics, supportive fiscal policy, and major economic catalysts, including Visit Malaysia Year 2026 and energy-led infrastructure programmes.
Malaysia’s diplomatic agility in navigating US-China tensions has reinforced its economic relevance in ASEAN. Despite volatility earlier in 2025, trading volumes on Bursa Malaysia remained resilient, with domestic investors underpinning demand. Key equity indices have rebounded steadily since the April 2025 dip.
Tariff Revisions and Monetary Trends Support Sentiment
CGS International maintains a constructive view as external headwinds ease. The firm sees Malaysia continuing to secure the top spot in ASEAN IPO rankings, supported by seven listings still in the pipeline for 2025 and regulatory enhancements expected in 2026 that could further increase the nation’s appeal as a listing destination.
Reciprocal tariffs imposed by the US have been revised down for Malaysia – from 24 percent to 19 percent – while more than 60 percent of Malaysian exports to the US are expected to be exempt. Combined with resumed US Fed rate cuts and a steady domestic policy rate outlook, narrowing rate differentials may strengthen the ringgit and improve equity inflows.
Reform-Driven Fiscal Strength Bolsters Confidence
Ongoing reforms under the MADANI government are tightening Malaysia’s fiscal position, with the deficit projected to improve from five point five percent of GDP in 2022 to 3.5 percent in 2026.
Policy blueprints such as the National Energy Transition Roadmap and New Industrial Master Plan are spurring substantial investment, with a record RM379 billion approved in 2024 and momentum holding strong into 2025.
Tourism-Linked Sectors Poised for Re-rating
With a target of 31 million international arrivals in 2026 and robust tourism spending forecasts, sectors such as aviation, retail, hospitality, healthcare and select REITs are expected to benefit.
Newly listed consumer-tourism players like Aquawalk Group offer direct exposure to this theme.
Transitioning Into a Growth-First Market Narrative
Malaysia enters 2026 with a compelling blend of macro stability, competitive positioning in ASEAN, and strong structural growth drivers. As domestic tailwinds strengthen and geopolitical risks recede, the market narrative is shifting decisively – from cautious recovery to proactive expansion.
