Tan Sri Azman Hashim
President
MASSA 

Bank Negara reported Malaysia’s GDP growth of 6.0% in the second quarter of 2026, up from 5.4% in the first, bringing growth for the first half of the year to about 5.7%. The expansion was led by services and manufacturing, the latter growing 7.3% on sustained global demand for electrical and electronics (E&E) products. Domestic demand held firm with private consumption up 4.8%, while credit to the private non-financial sector grew 6.4% and business loans expanded 7.2%, a sign that firms are still investing. Headline inflation remained contained at 1.9% for the quarter, and the Overnight Policy Rate was held at 2.75% at the July Monetary Policy Committee meeting.

In the first seven months of 2026, total trade reached RM2.160 trillion, crossing the RM2 trillion mark two months earlier than in 2025, while exports to ASEAN reached an all-time high of RM56.06 billion in the month of July alone. Bank Negara projects growth for the full year to remain within its forecast range of 4.0% to 5.0%, with recent developments suggesting the outturn could be nearer 5.0%. Household spending, the progress of multi-year projects in both the private and public sectors, and continued demand for E&E goods are expected to carry this momentum through the second half.

These are encouraging numbers, however, we should remain cautiously optimistic. The escalation of the conflict in the Middle East early in the year disrupted energy flows and lifted commodity prices, higher energy and freight costs are already working their way into production expenses, and a severe El Niño would place further pressure on food and commodity supply.

The global economy entered the second half of 2026 carrying the weight of a conflict-driven energy shock. Recent years have exposed vulnerabilities within the international economic system as conflicts in one part of the world can quickly disrupt food and energy security, as well as supply chain networks across continents. Questions of cost and efficiency are now being weighed together with geopolitical, climate and technological considerations.

Energy-importing and commodity-dependent economies across Africa, South Asia, Latin America and the Pacific face the sharper end of higher fuel, fertiliser and food prices, compounded by tighter financial conditions and elevated borrowing costs.

Today, the imperatives for business resilience call for diversified supply chains and trusted partnerships. Reinvigorating cross-border connectivity and cooperation is crucial. Trade, investment and the exchange of knowledge among developing countries remain a practical means of diversifying risk, shortening supply lines and building the productive capacity that insulates economies from shocks originating far from their shores. It is therefore clear that South-South cooperation remains relevant.

MASSA held its 35th Annual General Meeting on 24 June 2026. At the Meeting, the Association reaffirmed its commitment to bridge South-South cooperation through business partnerships, and to complement the initiatives of the Ministry of Investment, Trade and Industry (MITI) and its agencies, and the Ministry of Foreign Affairs (Wisma Putra). I would like to thank the Office Bearers and Executive Committee Members who continue to serve the Association for the term 2025/2027.

I appreciate the continuing support of all Members with your involvement at our regular meetings, events and webinars. I also wish to thank article and feature contributors from across the MASSA network, who have provided valuable and insightful articles for our readers and not forgetting the sponsors of our website.

Tan Sri Azman Hashim
President
11 September 2026