Malaysia's Trade Prospects To Remain Stable In 2026 Amid Global Headwinds - RHB IB
KUALA LUMPUR, April 20 (Bernama) -- Malaysia’s trade prospects in 2026 are expected to remain stable amid global headwinds arising from geopolitical tensions and potential adjustments in the United States tariff policies, said RHB Investment Bank Bhd (RHB IB) today.
The investment bank added that export performance in 2026 is expected to be supported by steady regional growth, alongside sustained demand for the electrical and electronics (E&E) exports.
“We stay vigilant on developments in the external environment with our in-house export growth projected at 9.3 per cent. Malaysia’s trade has shown notable resilience despite rising global protectionism and geopolitical tensions, with first quarter of 2026 export growth stood at 12.7 per cent,” RHB IB said in a research note today.
RHB IB said the E&E sector, a key pillar of Malaysia’s export base, is poised to maintain its growth momentum in the near term, underpinned by steady global demand for semiconductor components and consumer electronics.
The investment bank said structural drivers, including ongoing technological advancements and digitalisation trends, particularly in artificial intelligence, advanced data centres, electric vehicles and automation, were likely to continue supporting semiconductor demand.
RHB IB said while the investment bank was broadly positive about Malaysia’s export outlook in 2026, it noted that uncertainties surrounding global trade policies and geopolitical tensions warrant close monitoring.
It added that the direct impact of West Asia geopolitical tensions on Malaysia’s exports and manufacturing sector is anticipated to remain limited, given the country’s relatively low trade exposure to the region.
RHB IB said trade with Iran accounts for only 0.1 per cent of Malaysia’s total trade, while trade with the broader Middle East region represents approximately 4.2 per cent.
“In a more adverse scenario, a prolonged escalation of the US-Iran tensions, coupled with a surge in crude oil prices, could dampen global growth and trade, leading to negative spillovers on Malaysia’s external demand and affecting export-oriented sectors through weaker global demand and potential supply chain disruptions,” it added.
Separately, RHB IB said its assessment indicated that the transition of US reciprocal tariff policies to Section 122 of the Trade Act of 1974 could present some benefits for Malaysia.
With sectoral tariff exemptions covering 63.9 per cent of Malaysia’s exports, the effective tariff rate has declined to 3.6 per cent under the current 10 per cent regime, compared with 6.6 per cent under the previous 19 per cent regime, it added.
“Most of Malaysia’s key exports to the US, particularly machinery and electrical products, remain largely unaffected. This exemption coverage is broadly comparable to the 65.4 per cent coverage under Executive Order 14360, suggesting that overall tariff exposure remains contained,” said RHB IB.
-- BERNAMA
