Bank Negara Malaysia Urges Stronger Economic Fundamentals Amid Global Trade Uncertainty

Malaysia must reinforce its economic fundamentals and maintain strong policy buffers to sustain growth amid global trade uncertainty, according to Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour. In remarks accompanying the Bank Negara Malaysia Annual Report released on 31 March 2026, the governor highlighted the need for fiscal sustainability, structural reforms and deeper regional cooperation to support long-term resilience and ensure economic growth benefits households and businesses.

Strengthening Economic Foundations for Sustainable Growth

Abdul Rasheed said strengthening Malaysia’s economic fundamentals is essential for navigating external volatility while ensuring the wellbeing of the rakyat. Improving fiscal sustainability and attracting quality investment would create space for reforms in social protection and labour markets.

While such reforms may require short-term adjustments, he noted they are necessary to ensure economic growth is inclusive and benefits both current and future generations. The broader objective is to build an economy that delivers better-paying jobs, supports households and businesses, and remains resilient over the long term.

BNM expects Malaysia’s Gross Domestic Product to expand between four and five per cent in 2026. The central bank attributes this outlook to the country’s domestic resilience and diversified export structure, which together provide a buffer against global economic headwinds.

Financial Sector Stability Supports Economic Activity

The governor said Malaysia’s financial sector continues to perform its core role of channelling funds between savers and borrowers. Financial institutions remain well capitalised and operationally resilient, supported by strong liquidity buffers and sound asset quality.

This stability has helped maintain access to financing for households and businesses, sustaining consumption and investment across the economy. As Malaysia advances its financial sector reforms, the central bank is also encouraging innovation in areas such as digital finance and payment systems, complementing wider national efforts around secure and inclusive digital payment innovation.

The implementation of the Financial Sector Blueprint (FSBP) 2022–2026 is now entering its final phase. BNM plans to accelerate initiatives under the blueprint while beginning work on the next strategic direction for the country’s financial sector.

Future priorities include enabling innovation in emerging areas such as stablecoins and climate adaptation, while ensuring developments take place within a safe and responsible regulatory framework.

ASEAN Cooperation as a Buffer Against Global Uncertainty

Amid rising global trade tensions, Abdul Rasheed highlighted ASEAN’s role as an anchor of stability for Malaysia. Regional cooperation provides a platform for coordinated responses to external shocks and strengthens economic resilience across member states.

Under the ASEAN Finance Track, BNM has been involved in initiatives aimed at deepening regional financial and economic integration. One key development is the expansion of regional payment connectivity, with 29 payment linkages now operational across ASEAN countries.

These connections allow tourists and businesses to make and receive cross-border payments more quickly, securely and at lower cost. The approach aligns with broader regional efforts to modernise financial systems while supporting trade and economic participation.

Malaysia has also been strengthening its domestic capabilities in areas such as digital infrastructure and advanced technologies to support long-term economic resilience. These initiatives complement policy efforts described in national strategies aimed at strengthening critical technologies to boost economic resilience and enhancing connectivity across sectors.

Policy Vigilance and Market Stability

Looking ahead, BNM said it will remain vigilant in managing risks to economic growth and inflation. The Monetary Policy Committee will continue monitoring global and domestic developments to assess potential impacts on the economy.

The central bank also reaffirmed its readiness to ensure orderly financial markets and manage risks of excessive volatility, particularly during periods of heightened global uncertainty.

Through a combination of sound macroeconomic policies, financial sector reforms and regional cooperation, Malaysia aims to maintain stability while building the foundations for long-term, inclusive economic growth.