Malaysia’s economy grew 6.0% year-on-year in Q2 2026, exceeding the initial estimate of 5.8% and accelerating from 5.4% in Q1. Growth was driven by a strong rebound in mining and quarrying, which expanded 9.2% after contracting 2.1% in Q1, largely on the back of a sharp 19.3% increase in natural gas output. Manufacturing (7.3% vs 5.9% in Q1) and services (5.9% vs 5.6%) also posted faster growth.
In contrast, construction activity slowed, with growth easing to 6.5% from 7.7% in Q1. The agriculture sector contracted by 3.7%, reversing the 2.6% gain in the previous quarter, primarily reflecting declines in oil palm production (-9.5%) and fishing (-4.4%).
From the expenditure perspective, household consumption growth edged up to 4.8% from 4.7%, while government spending accelerated markedly to 7.6% from 4.1%. Net exports made a positive contribution to GDP, as exports surged 17.0% (vs 5.2% in Q1), outpacing imports, which rose 13.9% (vs 4.6%). Meanwhile, growth in gross fixed capital formation moderated to 4.6% from 7.3%.
On a quarter-on-quarter basis, GDP expanded 2.5% in Q2, the strongest quarterly increase since Q2 2020, following flat growth in Q1.
