Welcome to the first edition of Malaysia Economy This Week — a short weekly digest of the data, markets and policy moves shaping the Malaysian economy.
The week in three numbers: OPR held at 2.75% · IPI +8.4% · Foreign inflows return (+RM75m)
BNM on hold
Bank Negara kept the OPR at 2.75% on 9 July — a full year without a move since the July 2025 cut. It sees resilient Q2 growth driven by domestic demand and stronger-than-expected exports, contained inflation, and kept its 4–5% GDP growth forecast for 2026. The main risk flagged: a re-escalation of the Middle East conflict pushing up commodity prices.
Factories humming
May industrial production rose 8.4% y-o-y, the fastest since September 2022, led by natural gas output (+37.4%) and export-oriented electronics — computers, electronics and optical products grew 17%. The soft spot: domestic-oriented manufacturing slowed to 2% growth.
Foreign money returns
Foreign institutions bought a net RM75.3 million of Malaysian equities during 6–10 July — the first weekly inflow in eight weeks — flowing into utilities, banks and plantations, and out of tech. The KLCI reclaimed 1,690 and pushed toward 1,713; the ringgit held around RM4.07–4.08/USD.
Investment flows
Malaysia locked in RM92.8 billion of approved investments in Q1 2026 (1,249 projects, 50,226 jobs expected — up 46.7% y-o-y). Foreign investors supplied RM56.2 billion (60.5%), led by a remarkable RM21.5 billion from Japan — a 13.8-fold jump, almost all into digital transformation — with China and the US at RM10.1 billion each. Domestic investment grew 13% to RM36.6 billion. Data centres and cloud computing alone drew RM34.6 billion, cementing Selangor–Johor–KL as the region’s data-centre hub.
Bottom line
Export-led strength, a steady policy anchor, and early signs foreign investors are buying the stability story — from both the trading floor and the boardroom.
The week ahead
- Wed 16 July — China Q2 GDP. As Malaysia’s largest trading partner, any surprise feeds directly into export and KLCI sentiment.
- ~17–20 July — Malaysia advance Q2 GDP estimate and June external trade figures.
- ~22 July — June CPI. Headline inflation was 2.0% in May; watch food prices for supply-disruption pass-through.
Sources: DOSM, Bank Negara Malaysia, MIDA, MBSB Research weekly fund flow report.
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