FEBRUARY 11 — Malaysia’s economy is showing tremendous signs of sustained vigour — and national ambition must adjust to match this moment.

A recent poll of economists by Reuters suggests Malaysia’s economy expanded at its fastest pace in over a year in the fourth quarter of 2025, clearly outperforming the preceding quarter and signalling an economy that is firing on all cylinders.

This acceleration is not accidental. Domestic demand has remained resilient, private and public investment have strengthened, the services and manufacturing sectors are expanding in tandem, and Malaysia’s trade surplus has widened, even as external headwinds — including higher tariffs on exports to the United States — persisted.

Compared to many regional peers grappling with weak demand, slowing production, and fragile investor confidence, Malaysia stands out.

Its economic fundamentals have steadily strengthened since 2023, reflected in robust retail sales, firmer household consumption, improving trade balances, and rising investor interest.

Crucially, this confidence is increasingly visible in currency markets. 

The Ringgit has strengthened steadily, supported by improving external balances and renewed capital inflows. 

If current momentum is sustained — and policy credibility remains intact — it is not inconceivable for the Ringgit to test levels as strong as RM3.80 to the US dollar, restoring purchasing power and reinforcing Malaysia’s macroeconomic stability.

What is now emerging — if hesitantly acknowledged in some policy circles — is an economy that is not only resilient, but one with clear breakout potential.

From 5 per cent to 7 per cent: An aspirational but attainable target

Conventional policy thinking has long anchored expectations around moderate and cautious expansion for the year ahead, consistent with official projections and market consensus.

But given Malaysia’s trajectory — especially if the upswing in investment inflows, export diversification, industrial upgrading, and private-sector dynamism persists — there is a strong case for recalibrating national ambition toward a 7 per cent growth target.

Such an aspiration is not fanciful. Several Asian economies have reached or exceeded this pace during cyclical upswings when domestic consumption, technological investment, manufacturing depth, and external demand align. 

Vietnam hita growth of 8.1 per cent last year.

Indonesia is aiming for 8 per cent a year.

What Malaysia needs, more than marginal gains, is strategic momentum — one that repositions the country ahead of peers, generates quality employment, encourages innovation, and strengthens its role within global and regional value chains.

Political confidence anchored in economic performance

Economic momentum without political confidence is inherently fragile. 

Malaysia’s governing coalition under Anwar Ibrahim has steered the country through uncertain global waters since 2022, restoring policy coherence after years of instability.

What now matters is policy continuity, decisiveness, and credibility.

When an economy accelerates to its strongest pace in over a year, and positive indicators converge across consumption, trade, investment, currency strength, and confidence, leadership must act with clarity and resolve. Ambition must be matched with execution.

Strong performance provides the foundation to pursue bold reforms — including industrial transformation, green technology investment, digital upgrading, and deeper integration into regional supply chains — without succumbing to short-termism or excessive caution.

A broader narrative of national renewal

Malaysia’s emerging “sweet spot” among global investors — visible in rising portfolio inflows, renewed foreign interest, and a strengthening ringgit — suggests that international confidence is returning.

This should embolden policymakers at home to think bigger, not smaller.

The task ahead is to consolidate a shared national project: a vision not of incremental improvement, but of transformational economic renewal — one that lifts productivity, accelerates innovation, and broadens prosperity across regions and communities.

Conclusion

In times of economic promise, leadership must act, not defer. Malaysia stands at such a moment.

With stronger fundamentals, widening trade surpluses, resilient demand, improving investor sentiment, and a currency with clear upside potential, the case for aiming higher — even toward 7 per cent growth — is compelling. 

Once achieved, Malaysia should then aim for 8 per cent or even 9 per cent, to make up for lost years of underperformance since 1999.

But more than numerical targets, it is confidence, coherence, and credible leadership that convert promise into performance.

If Malaysia dares to think bigger — and governs with discipline and resolve — this moment of economic momentum can become the foundation of a renewed national trajectory.

* Phar Kim Beng is a professor of Asean Studies and director of the Institute of International and Asean Studies, International Islamic University of Malaysia.

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.