Malaysia’s export growth is projected to remain robust in the second half of 2026, driven primarily by sustained demand for electrical and electronics (E&E) products and a continuing upcycle in the semiconductor sector. Analysts also point to commodity shipments as a supplementary factor supporting trade, though heightened protectionism, geopolitical tensions, and challenging base effects may constrain growth momentum.
CGSI Research highlighted the resilience of Malaysia’s export sector amid firm manufacturing activity in China, which is expected to sustain demand for industrial and energy-related products in the region. The research firm noted that petroleum-related exports have gained from elevated energy prices and steady regional demand. Additionally, palm oil exports are anticipated to strengthen, as the Malaysian Palm Oil Council projects crude palm oil prices will likely remain above RM4,600 per tonne in September, influenced by tightening supplies, geopolitical uncertainties, and strong biofuel consumption.
Despite these positive indicators, CGSI Research cautioned that a global economic slowdown could dampen external demand and reduce commodity consumption. It also emphasized the risks posed by growing protectionist measures across major economies, which may disrupt trade flows and affect business confidence.
Hong Leong Investment Bank (HLIB) Research echoed a similar outlook, forecasting that exports will continue to contribute to Malaysia’s economic growth throughout the year, anchored by solid demand for E&E goods. However, HLIB flagged ongoing geopolitical tensions, tariff uncertainties, and the heavy reliance on integrated circuit exports as potential vulnerabilities. The bank maintained its 2026 gross domestic product growth forecast at 5.3%.
TA Research expressed cautious optimism but anticipated a moderation in both export and import growth in the latter part of the year due to unfavourable base effects. Nevertheless, they expect trade values to remain elevated, propelled by steady external demand and the semiconductor upcycle. TA Research stressed the importance of diversifying export markets and product offerings, as well as fully leveraging existing trade agreements and expanding into high-potential markets to sustain long-term trade growth.
Malaysia’s export expansion remained strong in July, rising 38% year-on-year mainly on the back of robust E&E shipments, while imports increased by 36.4%. The trade surplus widened to RM22.5 billion for the month, bringing the cumulative surplus for the first seven months of 2026 to RM170.5 billion—more than double the RM71.4 billion recorded in the same period last year.
An industry analyst also noted that Malaysia’s export momentum is expected to continue in the near term, with technology-related sectors providing critical support despite broader challenges in the global trade environment. They added that while growth rates might slow as the year progresses, resilient regional demand and ongoing investments in the semiconductor ecosystem are likely to underpin Malaysia’s external trade performance.