## IMF Executive Board Concludes 2026 Article IV Consultation with Malaysia _IMF News, February 27, 2026_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2026 Article IV Consultation with Malaysia](https://www.imf.org/en/news/articles/2026/02/26/pr-26065-malaysia-imf-executive-board-concludes-2026-article-iv-consultation) ## Other formats - [Markdown version](/en/news/articles/2026/02/26/pr-26065-malaysia-imf-executive-board-concludes-2026-article-iv-consultation/index.md) - [Structured JSON version](/en/news/articles/2026/02/26/pr-26065-malaysia-imf-executive-board-concludes-2026-article-iv-consultation/index.json) - [Bundle manifest](/en/news/articles/2026/02/26/pr-26065-malaysia-imf-executive-board-concludes-2026-article-iv-consultation/bundle-manifest.json) ## Bibliographic details - Published: February 27, 2026 --- ### Overview - On February 20, 2026, the Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Malaysia. - Staff’s estimate of Malaysia’s GDP growth in 2025: 4.9 percent; subsequent national accounts data released on February 13, 2026 show that Malaysia’s GDP growth in 2025 was 5.2 percent. - Press Release No. 26/065. ### Economic performance in 2025 - Real GDP growth (2025): 4.9 percent (staff estimate as of January 22, 2026); national accounts data released February 13, 2026 show 5.2 percent. - Average headline inflation (2025): 1.4 percent. - Fiscal consolidation progress: fiscal deficit estimated reduced from 4.1 percent of GDP in 2024 to 3.8 percent of GDP in 2025 under the Public Finance and Fiscal Responsibility Act. - Monetary policy: Bank Negara Malaysia (BNM) reduced the Overnight Policy Rate to 2.75 percent in July 2025 and kept it unchanged since then. - Policy framework: authorities’ 13th Malaysia Plan (released July 2025) emphasizes fiscal discipline and stronger governance, and promotes social mobility, affordable housing, health and pension reform, and resilience against climate shocks. ### Outlook and risks (near term) - Growth projection (2026): 4.6 percent. - Inflation projection (2026): 1.9 percent. - Growth drivers: strong domestic demand and a global tech-sector upcycle; near-term resilience expected. - Downside risks to growth: escalation in protectionist trade measures, global financial market volatility, potential bust of the AI boom. - Upside risks: breakthroughs in global trade negotiations, faster implementation of structural reforms. - Inflation risks: assessed as balanced. ### Executive Board assessment — summary of Directors' views - General view: Directors commended notable resilience of Malaysia’s economy against global uncertainty; growth expected to be supported by strong domestic demand; inflation projected to remain low and stable. - Risks: Directors agreed that risks to growth are tilted to the downside, stemming mainly from external factors, though upside risks can also materialize. - Fiscal policy: - Directors welcomed steady progress with fiscal consolidation under the Public Finance and Fiscal Responsibility Act. - General encouragement to reduce the fiscal deficit further to 2.5 percent of GDP by 2028, anchored by high-quality and sustainable revenue and expenditure measures. - Some Directors assessed that the authorities’ consolidation strategy is already well calibrated. - Monetary and external policy: - Directors agreed current monetary policy stance is appropriate and should stay data-dependent to continue to anchor inflation expectations and preserve growth. - Welcomed efforts to deepen the foreign exchange market and build reserves. - Agreed on importance of preserving exchange rate flexibility; alongside strengthening social safety nets and implementing structural reforms, this would help reduce external imbalances. - In the event of an adverse shock, a risk-off event could warrant the use of foreign exchange intervention to ease policy trade-offs. - Financial sector: - Directors concurred that systemic financial sector risks remain contained. - Noted banks maintain ample capital and liquidity buffers, household balance sheets are healthy, and the housing market remains stable. - Emphasized continued vigilance against pockets of vulnerabilities, such as highly leveraged households. - Policy response to shocks: - Directors encouraged authorities to stand ready to respond agilely to possible external shocks. - In an adverse shock, fiscal policy should cushion negative impact on vulnerable households and affected firms; any monetary policy response would depend on implications for inflation and output. - If upside risks materialize, authorities should use the opportunity to build macroeconomic buffers. - Structural reforms: - Swift implementation of structural reforms under the 13th Malaysia Plan is key for further domestic-driven and inclusive growth. - Labor market reforms to increase wages, reduce skill-related underemployment, and raise female labor force participation were emphasized. - Deeper trade and financial integration within ASEAN can boost Malaysia’s growth potential. ### Key statistics and projections (selected) - Nominal GDP (2024): US$422.2 billion - Population (2024): 34.1 million - GDP per capita (2024, current prices): US$12,397 - Poverty rate (2022, national poverty line): 6.2 percent - Unemployment rate (2024): 3.2 percent - Adult literacy rate (2022): 96.0 percent - Main goods exports (share of total exports, 2024): - Machinery and Transport Equipment: 45.6 percent - Manufactured Goods and Miscellaneous Manufactured Articles: 20.4 percent - Mineral Fuels, Lubricants etc.: 14.4 percent - Selected macro indicators (annual) - Real GDP growth: 2024: 5.1; 2025: 4.9; 2026: 4.6; 2027: 4.3 - Total domestic demand growth: 2024: 4.7; 2025: 4.4; 2026: 4.2 - Federal government overall balance (percent of GDP): 2024: -4.1; 2025: -3.8; 2026: -3.5; 2027: -3.2; 2028: -3.0 - Revenue (percent of GDP): 2024: 16.8; 2025: 15.9; 2026: 15.7 - Expenditure and net lending (percent of GDP): 2024: 20.9; 2025: 20.1; 2026: 19.4 - Federal government non-oil primary balance (percent of GDP): 2024: -4.7; 2025: -3.9; 2026: -2.8; 2027: -2.4 - General government debt (percent of GDP): 2024: 69.8; 2025: 70.0; 2026: 69.5; 2027: 68.6 - CPI inflation, annual average: 2025: 1.4; 2026: 1.9 - Overnight policy rate: 2024: 1.75; 2025: 2.75; 2026: 3.00 - Balance of payments and reserves - Current account balance (US$ billions): 2024: 8.2; 2025: 9.6; 2026: 11.8 - Gross official reserves (US$ billions): 2024: 116.2; 2025: 125.5; 2026: 130.9 - Total external debt (US$ billions): 2024: 304.4; 2025: 324.1; 2026: 340.8 *Source: IMF Communications Department — IMF Executive Board Concludes 2026 Article IV Consultation with Malaysia (Press Release No. 26/065).* --- ## References - [Malaysia and the IMF](http://www.imf.org/external/country/MYS/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/) - [http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2026/02/26/pr-26065-malaysia-imf-executive-board-concludes-2026-article-iv-consultation_