KUALA LUMPUR, July 31 — Malaysia’s economy expanded by 5.8 per cent in the second quarter of 2026, up from 5.4 per cent in the previous quarter, driven by stronger performances in the services and manufacturing sectors, the Department of Statistics Malaysia (DOSM) said today.

DOSM said the economy recorded growth of 5.6 per cent in the first half of 2026 compared with 4.5 per cent in the same period last year, with mining and quarrying showing signs of recovery while the construction sector continued to expand.

“The growth was supported by the Services and Manufacturing sectors, alongside the recovery in the Mining & Quarrying sector and the continued expansion of the Construction sector,” DOSM said in its Malaysian Economic Statistics Review (MESR), Volume 7/2026.

“However, the Agriculture sector contracted due to lower production of palm oil and fisheries,” it added.

Malaysia’s industrial activity also remained strong, with the Industrial Production Index (IPI) increasing 8.4 per cent in May 2026, compared with 8.2 per cent growth in April.

DOSM said the increase was mainly supported by the manufacturing sector, which grew 6.6 per cent, while the mining sector recorded stronger growth of 19.8 per cent, followed by the electricity sector with a 4.2 per cent expansion.

The manufacturing sector recorded sales of RM172.7 billion in May 2026, an 8.9 per cent increase year-on-year, supported mainly by the electrical and electronics products subsector, which surged 26.4 per cent.

Malaysia’s wholesale and retail trade also recorded stronger activity, with total sales rising 11 per cent year-on-year to RM171.3 billion in May, driven mainly by wholesale trade which expanded 18.4 per cent to RM80.8 billion.

On the external front, DOSM said total trade increased 29.8 per cent year-on-year to RM327.6 billion in May, supported by exports which jumped 45.3 per cent to RM184 billion.

Imports rose 14.1 per cent to RM143.6 billion, resulting in a wider trade surplus of RM40.4 billion.

DOSM said the positive momentum continued in June, with total trade increasing 44.7 per cent year-on-year to RM340.9 billion, while exports and imports grew 45.4 per cent and 43.9 per cent respectively.

Meanwhile, inflation rose 2 per cent in May 2026, with higher prices recorded for information and communication, food and beverages, housing, water, electricity, gas and other fuels, as well as recreation, sport and culture.

Inflation eased slightly to 1.9 per cent in June 2026.

Malaysia’s labour market remained stable in May, with the labour force increasing 0.1 per cent to 17.34 million people while employment rose marginally to 16.82 million people.

The labour force participation rate stood at 70.9 per cent, while the unemployment rate remained unchanged at 3 per cent despite a slight increase in the number of unemployed people to 513,400.

DOSM said Malaysia’s economic outlook remained broadly steady, supported by stable domestic demand and the economy’s ability to adapt to global changes and technological advancements.