Overview

Malaysia’s economic outlook for the second quarter of 2026 is expected to remain resilient
with the Leading Index recording 0.1 per cent in December 2025

Malaysia’s economy is expected to remain resilient supported by the performance of the Leading Index (LI) in December 2025, which recorded a marginal increase of 0.1 per cent to 114.0 points as compared to 113.9 points in the same period of the previous year. This performance was reinforced by increases in the Real Money Supply M1 (7.3%) and the Real Imports of Semi Conductors (4.8%), reflecting stable domestic financial liquidity as well as sustained demand for electronic components. From a monthly perspective, the LI also recorded an increase of 0.5 per cent, supported by growth in the Real Money Supply M1 (0.5%) and Expected Sales Value in Manufacturing (0.4%).

Examining the smoothed long-term trend in December 2025, the LI remained below 100.0 points. However, Malaysia’s economy is expected to remain resilient, supported by the progressive new economy and the Visit Malaysia Year 2026 initiative, which is anticipated to stimulate the local businesses, tourism sector and other economic activities indirectly.

In assessing the current economic situation, the Coincident Index (CI) maintained its positive momentum, recording an annual growth of 2.1 per cent to 129.3 points as compared to 126.6 points in the same month last year. This performance was driven by consistent increases across all components with the Real Contribution of the Employees Provident Fund (EPF) rising 9.6 per cent as the largest contributor. However, on a monthly basis, the CI recorded a marginal decline of 0.02 per cent due to contractions in Capacity Utilisation in Manufacturing and the Volume Index of Retail Trade, both of which recorded a decline of 0.1 per cent.

The Diffusion Index for the LI showed to 28.6 per cent in the reference month, declined from 42.9 per cent in the previous month. Meanwhile the Diffusion Index for CI remained at 83.3 per cent.

For interviews, press statement and clarification to the media, contact:
Baharudin Mohamad
Public Relation Officer
Email: baharudin[at]dosm.gov.my
Phone: 03 8090 4681

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