BMI Country Risk & Industry Research says risks surrounding the US-Iran conflict could 'keep a lid' on economic activity in Malaysia.
Malaysia’s GDP grew by 5.4% in Q1 2026, moderating slightly from 6.2% in the previous quarter, according to data released by Bank Negara Malaysia (BNM) last Friday.
In a research note today, BMI Country Risk & Industry Research (BMI), a unit of Fitch Solutions, said concerns surrounding the US-Iran conflict could dampen economic activity and investor sentiment in Malaysia.
“We remain confident that Q1 2026 probably marked the peak in growth,” it said.
“Additionally, risks surrounding the ongoing US-Iran conflict could keep a lid on economic activity, prompting us to leave our 2026 real GDP growth forecast unchanged at 4.3%.”
The research house also highlighted the possible fuel subsidy rationalisation for higher-income groups, saying this could soften consumer sentiment and reduce discretionary spending among households that account for a significant share of domestic demand.
BMI noted that private consumption remained the main driver of growth in Q1 2026, but warned that prolonged geopolitical tensions could lead to higher inflation and weaker domestic spending.
It cautioned that a wider escalation of the Iran conflict could drive oil prices above its forecast of US$90 per barrel, fuelling inflation and slowing domestic activity.
BMI also noted that BNM governor Abdul Rasheed Ghaffour indicated last Friday that inflation could trend towards the upper end of the central bank’s 1.5% to 2.5% forecast range for 2026. - FMT
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.