M’sia exports expected to sustain momentum

By the Editorial Team · Tuesday, September 22, 2026

Malaysia’s export growth is projected to remain robust through 2026, with revised forecasts anticipating a 28.5% increase driven mainly by strong demand for electrical and electronics products and rising shipments to key markets like the U.S. However, analysts caution that risks such as U.S. trade policy uncertainties, slowing global growth, and commodity price fluctuations could slow momentum in the latter half of the year.

Malaysia’s export sector is expected to maintain strong momentum through 2026, though growth is likely to slow in the latter half of the year as favorable base effects ease, according to recent market analyses.

Kenanga Research has revised its export growth forecast for 2026 significantly upward to 28.5% from an earlier estimate of 19%, driven mainly by robust demand for electrical and electronics (E&E) products. The surge is attributed to increased investment in artificial intelligence-related technologies and new product launches. The research firm projects total exports to surpass RM2 trillion this year, supported by ongoing semiconductor demand and strong shipments to the United States.

In August, Malaysia’s exports re-accelerated by 45.5% year-on-year (y-o-y), up from 38% in July, exceeding both market consensus of 38% and Kenanga’s internal projection of 44.4%. The cumulative export growth for the first eight months of the year reached 31.2%, up from 29.2% in the January to July period, indicating sustained external demand into the third quarter.

E&E products remain the primary growth driver, with exports in this category reaching a four-month high by increasing 66.5% in August compared to 51% in July. E&E accounted for nearly half of total exports, representing 48.4%, marginally lower than the 49.4% share recorded previously. The United States emerged as a significant market, with exports there rising 139.1% y-o-y, while shipments to Singapore, Taiwan, Hong Kong, and Japan also posted strong gains. Exports to China and the European Union continued to grow but at a moderated pace.

Hong Leong Investment Bank (HLIB) Research echoed this positive outlook, emphasizing that the global semiconductor upcycle remains the main engine behind Malaysia’s export strength. August’s manufactured exports rose 53.4%, driven predominantly by E&E products growing 66.5%. Integrated circuit exports surged 97%, and solid-state storage devices increased by an exceptional 468.8%. Meanwhile, global chip sales climbed 135.1% during the month.

Commodity exports showed mixed results. Liquefied natural gas exports rose 51.8%, buoyed by higher volumes and price improvements, whereas crude petroleum exports declined by 19.3%. Palm oil exports also dropped by 25%. Imports grew 41.1% y-o-y, with intermediate goods rising 50.5% and capital goods up 37.4%. Kenanga Research interprets the strength in intermediate goods imports as indicative of solid production momentum and the rise in capital goods imports as a sign of ongoing investment activity.

The strong trade performance lifted Malaysia’s trade surplus to RM28.1 billion in August, up from RM22.5 billion in July.

Despite the optimistic outlook, analysts warned of potential headwinds that could dampen growth going forward. HLIB Research highlighted the upcoming U.S. decision on excess-capacity tariffs as a significant downside risk. Kenanga also cited renewed uncertainty surrounding U.S. trade policy, weaker global economic growth, rising energy prices, geopolitical tensions, possible post-AI demand declines for electronics, and commodity price volatility. Nevertheless, HLIB maintained its gross domestic product growth forecast for Malaysia at 5.3% for 2026, underscoring expectations that strong trade will continue to support the domestic economy.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.