Kuala lumpur: Malaysia's economy is projected to grow by 5.3% in the first quarter of 2026 (1Q 2026) based on advance estimates, reflecting an economy that remains fundamentally resilient, despite rising global uncertainties, particularly elevated oil prices driven by geopolitical tensions, said the Department of Statistics Malaysia (DOSM).

According to Emirates News Agency, the chief statistician of DOSM, Mohd Uzir Mahidin, noted that the manufacturing sector maintained positive momentum in the first two months of 2026, with output expanding by 7.3% and 4.2%, respectively. This growth was largely driven by export-oriented industries and seasonal festive spending that continued to support overall economic activities.

The services sector continued to anchor overall GDP expansion, registering a 5.4% growth, compared to 6.3% in the fourth quarter of 2025. This sector's performance was attributed mainly to the growth in the wholesale and retail trade sub-sector, which reflected sustained consumer spending. This spending was supported by a stable labour market, higher household income, and ongoing people-centric initiatives to stimulate household-related activities.

Meanwhile, the information and communication sub-sector also contributed to the quarter's performance, supported by rising demand for data centre and generative artificial intelligence (AI)-related activities.

The manufacturing sector recorded a growth of 5.8%, slightly down from 6.1% in the fourth quarter of 2025. This growth was largely supported by strong output in electrical, electronics and optical products, as well as vegetable and animal oils and fats and food processing.

Mohd Uzir added that the construction sector's growth declined to 7.8% in 1Q 2026 from 11.0% in the previous quarter, supported primarily by specialised construction activities and non-residential buildings. The agriculture sector grew 2.8%, compared to 5.4% in the fourth quarter of 2025, attributed to growth in the oil palm and livestock sub-sectors.