KUALA LUMPUR – Malaysia’s economic growth slowed but still exceeded expectations as the artificial intelligence boom continued to bolster exports and domestic demand remained resilient.
Gross domestic product rose 5.3% in the three months through September from a year earlier, according to advance estimates from the Department of Statistics Malaysia on Oct 16, beating the 5.1% median prediction in a Bloomberg survey.
Third quarter growth, however, slowed from the 6% expansion in the previous three-month period.
Third quarter growth was underpinned by positive performance across most economic sectors, the department said in a statement.
Only the mining and quarrying sector contracted, it added.
The better-than-expected reading underscores the resilience of Malaysia’s economy even as growth moderates from a strong first half.
Robust domestic consumption and demand for electronics used in artificial intelligence have helped cushion the trade-dependent economy from disruptions caused by the US war against Iran.
The services sector rose 5.4%, bolstered by wholesale and retail trade, information and communication as well as finance, the statistics department said.
Manufacturing strengthened by 7.5%, backed in part by export-oriented industries, particularly electrical and electronic products.
Bank Negara Malaysia governor Abdul Rasheed Ghaffour said in an interview this week that the economy is likely to grow about 5% in 2026, with the nation’s diverse sources of growth helping cushion it against any slowdown in the AI boom.
Malaysia’s economy grew 5.5% during the three quarters of 2026, the department said, above the government’s revised growth forecast of 4.8% to 5.3% for the year.
The government in October raised the forecast from 4% to 5% previously.
Household spending remains firm, as fuel subsidies helped shield consumers from elevated energy cost.
Prime Minister Anwar Ibrahim earlier in October also announced more cash aid and a higher minimum wage for 2027 to ease cost-of-living pressures.
The government expects Malaysia’s economy to grow at 4.2% to 5.2% in 2027, supported by sustained domestic demand investment activity.
Preliminary GDP data, which will provide a detailed analysis of the third quarter, will be released on Nov 18. BLOOMBERG
