Overview

Malaysia’s economy is expected to expand at a moderate pace,
with the Leading Index recording 0.5 per cent in February 2026

The annual growth of Malaysia’s Leading Index (LI) remained positive, recording 0.5 per cent in February 2026, reaching 113.1 points as compared to 112.5 points in the same month of the previous year.  The Real Imports of Other Basic Precious & Other Non-ferrous Metals (18.7%) was the main contributor to this increase, followed by the Real Money Supply, M1 (8.4%). This improvement reflects trade activity and liquidity flows in the domestic economy that remained strong, in line with sustained demand in related sectors. Despite the increase, overall performance was also influenced by declines in several components, with five out of seven components recording contractions, notably the Number of Housing Units Approved (-22.2%). In terms of monthly performance, the LI edged down 0.3 per cent, due to moderation in several components, particularly the Real Imports of Semi Conductors and the Number of New Companies Registered, each of which decreased by 0.6 per cent.

The smoothed long-term trend of the LI in February 2026 remained below 100.0 points, reflecting moderate near-term economic growth, supported by resilient domestic fundamentals. Nevertheless, persistent geopolitical tensions, alongside fluctuations in global commodity and crude oil prices, could affect trade activity, although the overall impact is expected to remain contained.

In light of the current economic scenario, the Coincident Index (CI) saw a rise of 1.6 per cent with 129.4 points as compared to 127.4 points in the same month last year. This increase was contributed by almost all components except the Capacity Utilisation in Manufacturing (-1.5%). However, on a monthly basis, the CI contracted by 1.4 per cent, reflecting slower performance in several components, particularly in the Real Contributions to the Employees Provident Fund (EPF) (-0.6%). The softened momentum was supported by a more cautious approach among employers amid an uncertain economic environment, including cost pressures, labour market adjustments, as well as global uncertainties affecting the current economic momentum.

The Diffusion Index for LI and CI recorded a decline in February 2026, with the LI Diffusion Index registering 42.9 per cent, while the CI Diffusion Index stood at 50.0 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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