Malaysia’s economic growth forecast for 2026 has been revised upward to 5.1 percent, driven in part by strong activity related to artificial intelligence (AI), the World Bank disclosed on Tuesday. The adjustment reflects an increase of 0.7 percentage points compared to previous estimates, following a stronger-than-expected performance in the first half of the year.

The World Bank highlighted that Malaysia, alongside several other economies in the East Asia and Pacific region, has experienced faster growth than anticipated in 2026. This acceleration is largely attributed to robust manufacturing and export activities, particularly in high-tech sectors that support the expansion of AI-related technologies globally.

Malaysia’s domestic demand is projected to continue serving as the primary engine of growth throughout the year. The country’s economy demonstrated resilience during the first half of 2026, with real gross domestic product (GDP) growth rising from 5.4 percent in the first quarter to 6.0 percent in the second quarter. This upward trajectory contributed to the overall positive revision in growth expectations.

The World Bank’s East Asia and Pacific Economic Update emphasizes the importance of high-value manufacturing and technology-driven exports in sustaining the region’s economic momentum, noting that these factors have played a significant role in Malaysia’s enhanced growth outlook.