BNM Urges Stronger Economic Fundamentals As Malaysia Navigates Global Trade Uncertainty
Bank Negara Malaysia (BNM) has emphasised the need to strengthen economic fundamentals and policy buffers as global trade uncertainties persist. In its latest assessment, the central bank said maintaining fiscal sustainability, attracting quality investments and advancing structural reforms will be essential to sustaining Malaysia’s growth and safeguarding public well-being. According to the BNM Annual Report, the country’s domestic resilience and diversified export structure are expected to support steady economic performance in the coming year.
The central bank projects Malaysia’s gross domestic product (GDP) to grow between four per cent and five per cent in 2026. This outlook reflects confidence that domestic demand and external trade diversification will help the economy navigate ongoing global headwinds.
Reforms Needed To Support Inclusive And Sustainable Growth
Speaking in the report, Bank Negara Malaysia Governor Datuk Seri Abdul Rasheed Ghaffour said strengthening fiscal sustainability and encouraging higher-quality investments would create room to advance structural reforms, particularly in social protection and labour market policies.
“These reforms may involve some short-term adjustments, but they are necessary to ensure that growth is more inclusive and benefits the rakyat – including generations to come,” — Datuk Seri Abdul Rasheed Ghaffour, Governor, Bank Negara Malaysia
The governor added that Malaysia’s path towards becoming a developed, high-income nation must be underpinned by shared prosperity. Stronger economic structures, he said, should support better-paying jobs, resilient businesses and sustainable household income growth over the long term.
Financial Sector Stability Supports Households And Businesses
The report noted that Malaysia’s financial sector remains effective in mobilising funds between savers and borrowers. Financial institutions are described as well capitalised and operationally resilient, supported by strong liquidity buffers and sound asset quality.
“Financial institutions remained well capitalised and operationally resilient, supported by ample liquidity buffers and sound asset quality. This ensured continued access to financing for households and businesses, supporting consumption, investment and livelihoods.” — Datuk Seri Abdul Rasheed Ghaffour, Governor, Bank Negara Malaysia
The stability of the financial system continues to underpin economic activity by enabling consistent access to credit and supporting domestic demand.
ASEAN Financial Integration Strengthens Regional Resilience
BNM also highlighted the importance of regional cooperation in managing global uncertainty. In an increasingly fragmented economic environment, ASEAN’s coordinated approach to trade and financial stability can help member states respond more effectively to external shocks.
Under the ASEAN Finance Track, BNM has helped advance deeper financial and economic integration, including expanding regional payment connectivity. There are now 29 operational payment linkages across ASEAN member states, enabling faster, more secure and lower-cost cross-border transactions for consumers and businesses. These developments complement broader regional efforts to expand secure and inclusive digital payment innovation.
Regional mechanisms such as enhancements to the Chiang Mai Initiative Multilateralisation and strategies developed by the ASEAN Geoeconomics Task Force are also strengthening the region’s ability to respond collectively to global economic disruptions.
Next Phase Of Financial Sector Development
As the Financial Sector Blueprint (FSBP) 2022–2026 enters its final phase, BNM plans to accelerate implementation while preparing the next roadmap for Malaysia’s financial sector. The central bank intends to support innovation while maintaining strong regulatory safeguards.
Emerging areas of focus include digital finance, stablecoins and climate adaptation financing. These initiatives align with broader regional discussions on financial sector resilience and responsible innovation, similar to ongoing conversations highlighted in efforts to strengthen trust and resilience in financial systems.
BNM’s Monetary Policy Committee will continue to monitor developments in growth and inflation while remaining prepared to ensure orderly financial markets and manage risks from excessive volatility.
