KUALA LUMPUR, Aug 14 — The government’s proactive response to the West Asia crisis, including financing support for affected small and medium enterprises (SMEs) and targeted fuel subsidies, helped sustain household spending and business activity in the country.

This helped contribute to the economy’s strong growth momentum into the second quarter of this year (2Q 2026), said Prime Minister Datuk Seri Anwar Ibrahim.

“Reforms under the Madani Economy framework, together with proactive government measures, have helped shield the rakyat from the full impact of global supply disruptions while supporting consumption and economic growth,” Anwar said in a statement issued by the Ministry of Finance today. 

Anwar, who is also the finance minister, noted that while disruptions to the global supply chains have exerted upward pressure on prices worldwide, Malaysia’s inflation remained contained at 1.9 per cent in 2Q 2026. 

“The Madani Government has also continued to provide support through Sumbangan Tunai Rahmah, Sumbangan Asas Rahmah and targeted subsidy mechanisms under Budi Madani to cushion vulnerable households from rising costs,” he added.

Anwar also emphasised that while Malaysia’s growth momentum remains resilient, the Madani Government remains mindful that the benefits of economic growth are not felt evenly across households and businesses. 

“Malaysia is not immune to the effects of these global disruptions. While the headline economic indicators remain encouraging, we recognise that many Malaysians continue to face pressures from the cost of living, while some workers and businesses are navigating a more difficult operating environment,” the prime minister said.

The Madani Government, he said, will therefore continue to prioritise measures that protect household purchasing power, support affected workers and businesses, and ensure that continued economic growth translates into higher incomes, better employment opportunities and tangible improvements in the lives of the rakyat.

Continued geopolitical uncertainty, disruptions to global supply chains, higher input and food prices, and employment pressures in certain sectors remain key risks to household well-being and business activity.

Against a global supply shock that has disrupted the world’s economy, Malaysia continued to defy expectations for the third consecutive quarter, growing by 6.0 per cent in 2Q 2026 compared with 5.4 per cent in the preceding quarter.

Powered by resilient domestic demand and a robust external sector, the country’s GDP growth exceeded both the Department of Statistics Malaysia’s advanced estimate and Bloomberg’s median forecast of 5.8 per cent. This marked Malaysia’s strongest second-quarter showing outside the pandemic period since 2014.

The 2Q 2026 performance brought growth in the first half of 2026 (1H 2026) to 5.7 per cent, placing the economy on a firm footing relative to the government’s full-year growth forecast of 4.0 to 5.0 per cent. — Bernama