In a research note, the rating agency said domestic consumption in Malaysia will be underpinned by a low unemployment rate, which stood at 2.9 percent in November 2025, rising real wages partly driven by income-related policy support, and subdued inflation, News.Az reports, citing Xinhua.
Moody’s also forecast Malaysia’s inflation rate to average 1.8 percent in 2026.
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“Investment demand outlook remains robust due to implementation of multiyear projects, both in the public and private sectors,” the agency said.
According to Moody’s, public investment in Malaysia is largely concentrated in transportation, energy, and civil engineering projects. At the same time, the country continues to attract foreign investment in electrical and electronics manufacturing, as well as data center development.
The agency added that Malaysia is expected to benefit from healthy growth in tourism and sustained demand for electronics products. However, it cautioned that a slowdown in global economic growth, particularly among Malaysia’s key trading partners, remains a risk given the country’s open and trade-dependent economy.
“We expect the central bank to maintain its neutral monetary policy stance with policy rates around current levels of 2.75 percent in 2026, which will not constrain credit demand,” Moody’s said.
Overall credit growth across Malaysia’s banking system is projected to be around 5 percent, the agency added.
