## IMF Staff Completes the 2026 Article IV Mission to Malaysia

_IMF News, December 19, 2025_

## Source details

**Canonical URL:** [IMF Staff Completes the 2026 Article IV Mission to Malaysia](https://www.imf.org/en/news/articles/2025/12/18/pr-25430-malaysia-imf-staff-completes-the-2026-article-iv-mission)

## Other formats

- [Markdown version](/en/news/articles/2025/12/18/pr-25430-malaysia-imf-staff-completes-the-2026-article-iv-mission/index.md)
- [Structured JSON version](/en/news/articles/2025/12/18/pr-25430-malaysia-imf-staff-completes-the-2026-article-iv-mission/index.json)
- [Bundle manifest](/en/news/articles/2025/12/18/pr-25430-malaysia-imf-staff-completes-the-2026-article-iv-mission/bundle-manifest.json)

## Bibliographic details
- Published: December 19, 2025

---

### Mission summary
- IMF team led by Mr. Masahiro Nozaki conducted the 2026 Article IV Consultation discussions with Malaysian authorities and stakeholders from December 8-19, 2025.
- Statement issued at the conclusion of discussions conveys IMF staff’s preliminary findings; views are those of IMF staff and do not necessarily represent the IMF’s Executive Board.
- The October 2025 Malaysia-U.S. trade deal helped reduce uncertainty for businesses and consumers in Malaysia.

### Economic outlook and risks
- Malaysia has shown notable resilience against global trade tensions and policy uncertainty, with growth supported by:
  - strong domestic consumption and investment,
  - solid employment growth,
  - a global tech-sector upcycle.
- IMF staff projections and near-term outlook:
  - Growth projected to slow from 4.6 percent in 2025 to 4.3 percent in 2026, mainly reflecting the impact of higher U.S. tariffs on Malaysia.
  - Inflation averaged 1.4 percent during January-October 2025 and is projected to remain stable and gradually return to its long-term average of 2 percent.
- Risks to growth are tilted to the downside and stem mainly from external factors:
  - escalation of protectionist trade measures,
  - global financial market volatility,
  - potential bust of the AI boom.
- Upside risks include:
  - breakthroughs in global trade negotiations,
  - stronger-than-envisaged tourism activities,
  - faster implementation of structural reforms.

### Fiscal policy, public debt, and fiscal buffers
- Fiscal achievements and targets:
  - Passage of the Public Finance and Fiscal Responsibility Act in 2023 demonstrates commitment to prudent fiscal management.
  - Authorities plan to reduce the fiscal deficit to 3.5 percent of GDP in 2026 and to 3.0 percent of GDP by 2028.
- Public debt:
  - Federal government debt was 64.6 percent of GDP at end-2024, still above pre-pandemic levels.
- Policy guidance:
  - Rebuilding macroeconomic buffers remains critical given elevated global uncertainty.
  - Continue fiscal consolidation with further high-quality and sustainable revenue and expenditure measures.
  - Strengthen fiscal transparency and spending efficiency, including implementation following the new Government Procurement Act.

### Monetary policy and inflation
- Inflation and monetary stance:
  - Inflation averaged 1.4 percent during January-October 2025; projected to return gradually to the long-term average of 2 percent.
  - Staff assesses the current monetary policy stance as appropriate.
- Policy guidance:
  - Monetary policy should remain data-dependent to anchor inflation expectations and preserve growth amid heightened global uncertainty.
  - Continue commitment to exchange rate flexibility and efforts to deepen the foreign exchange market.

### Financial sector resilience and risks
- Systemic risks:
  - Systemic financial sector risks remain contained.
  - Malaysian banks maintain ample capital and liquidity buffers.
  - Corporate and household balance sheets are healthy; the housing market remains stable.
- Vulnerabilities to monitor:
  - Highly leveraged households,
  - Banks’ exposure to firms affected by the U.S. tariffs,
  - Linkages between banks and non-bank financial institutions.
- External funding:
  - Banks’ external funding risks remain contained and are mitigated by holdings of ample foreign currency assets, but continued monitoring is warranted given elevated global financial market risks.

### Structural reforms and policy recommendations
- Swift implementation of structural reforms under the 13th Malaysia Plan (13MP) for 2026-30 is key to boosting domestically driven and inclusive growth.
- Priority reforms and areas of focus:
  - Labor market reforms to increase private sector wages, reduce skill-related underemployment, and raise female labor force participation.
  - Deeper trade and financial integration within ASEAN to boost long-run growth potential.
- Staff welcomes ongoing efforts and recommends accelerated implementation to realize growth and inclusion objectives.

### Closing
- The IMF team thanked officials of the Government of Malaysia, Bank Negara Malaysia, other public institutions, and private sector representatives for productive discussions.

*IMF Press Release No. 25/430 — December 19, 2025.*

---


## References

- [Angola and the IMF](http://www.imf.org/external/country/AGO/index.htm)
- [Malaysia and the IMF](http://www.imf.org/external/country/MYS/index.htm)
- [Saudi Arabia and the IMF](http://www.imf.org/external/country/SAU/index.htm)
- [Ghana and the IMF](http://www.imf.org/external/country/GHA/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2025/12/18/pr-25430-malaysia-imf-staff-completes-the-2026-article-iv-mission_