Malaysia’s Economy Remains Resilient, Backed by Manufacturing and Data Centres

Malaysia’s economic outlook remains resilient, supported by strong manufacturing activity, infrastructure investment and the rapid expansion of the data centre sector, according to S&P Global Ratings.

Senior Asia-Pacific economist Vishrut Rana said Malaysia continues to benefit from its important position in the regional technology supply chain, particularly through robust production of technology and electronic products. 

Manufacturing, Data Centres Drive Malaysia’s Growth

Rana said continued investment in technology manufacturing could help Malaysia move further up the value chain, while major infrastructure projects involving rail and transportation are also supporting economic activity.

Data centres have emerged as another increasingly important source of growth, with investments accelerating in recent months. Strong mining output, particularly gas exports, also contributed to national income during the second quarter. 

S&P expects Malaysia’s 2026 economic growth to exceed its earlier 4.9 per cent projection, following stronger-than-expected performance during the first half of the year.

Inflation remains relatively contained at around two per cent, while the ringgit has remained relatively strong without significantly hurting export competitiveness. Labour market conditions were also described as steady, providing additional support for the economic outlook.