KUALA LUMPUR — Bank Negara Malaysia (BNM) has maintained the Overnight Policy Rate (OPR) at 2.75 per cent, citing resilient domestic economic growth and an inflation outlook that remains manageable.
The central bank said the Monetary Policy Committee (MPC), at its meeting today, considered the current monetary policy stance consistent with the outlook for continued price stability and sustainable economic growth.
Recent indicators point to continued strength in Malaysia’s economic growth in the third quarter of 2026, supported by robust export performance and sustained domestic demand.
BNM said the solid growth momentum was expected to bring the country’s economic growth for 2026 to above five per cent.
Looking ahead, Malaysia’s sound economic fundamentals are expected to support resilient growth in 2027, with the external sector remaining a major contributor, driven by the global technology upcycle and firm tourist spending.
Stable labour market conditions and continued investment activity are also expected to sustain domestic demand, while measures under Budget 2027 will provide further support to private consumption.
However, the growth outlook remains subject to downside risks, including a prolonged conflict in the Middle East and lower commodity production.
On the upside, stronger-than-expected global growth, higher demand for technology-related exports and increased tourism activity could provide additional impetus to the economy.
Reach More Customers.
Promote your business with Labuan Times.
Advertise Now →
On inflation, BNM said headline and core inflation averaged 1.8 per cent and 1.9 per cent, respectively, in the first 10 months of 2026.
Both indicators are expected to edge higher in 2027 amid geopolitical developments, elevated global commodity prices and adverse weather conditions.
Nevertheless, inflation is expected to remain contained, supported by continued domestic policy measures and stable demand conditions.
The MPC said it would remain vigilant to cost pressures and domestic demand conditions, given their implications for the inflation outlook.
Globally, the central bank noted that growth remained resilient, supported by strong technology-related investment and stable labour market conditions.
However, inflation had edged higher following increased energy costs and was expected to remain elevated as higher costs continued to be passed on to consumers.
BNM said uncertainties surrounding geopolitical developments and persistent inflationary pressures would continue to weigh on global growth, although the impact was expected to be cushioned by sustained technology-related spending and ongoing adjustments to supply constraints.
Downside risks include prolonged geopolitical tensions, tighter global financial conditions arising from monetary policy adjustments, financial market valuation concerns and fiscal vulnerabilities.
Conversely, stronger technology spending and a faster-than-expected recovery in supply chain conditions could provide upside potential to global growth.
BNM said the MPC would continue monitoring evolving economic conditions and assess their implications for the balance of risks surrounding Malaysia’s inflation and growth outlook.
