Malaysia is projected to experience faster economic growth in 2026 compared to the previous year, buoyed by its significant involvement in the artificial intelligence (AI) supply chain, Moody’s Analytics reported. This contrasts with the broader Asia-Pacific region, where overall growth is expected to slow due to a range of challenges including geopolitical tensions, trade disputes, and policy uncertainties.

In its Asia-Pacific Outlook, Moody’s Analytics characterized the region’s economic landscape as bifurcated, with countries integrated into the AI sector advancing more rapidly, while those less connected face difficulties. The growth in AI-driven demand is particularly evident in the surge of semiconductor exports and other technology products, which have supported stronger shipments from several Asian economies.

Investment related to AI has also stimulated considerable spending on data centres (DCs), and cross-border investments in DC infrastructure have notably increased, with a significant portion of this capital directed into Asia. This influx is helping to offset weaker performance in other sectors and regions within the broader Asia-Pacific area.

Malaysia’s positioning within the AI ecosystem has therefore contributed to a more resilient growth outlook, standing out among its peers amid a period of uneven economic momentum across the region.