I recently came across an investment bank report that I found quite interesting, analyzing Malaysia's economic outlook.

This bank, Hong Leong, re-evaluated and lowered the GDP growth forecast for 2026 from 4.7% to 4.5%, mainly due to concerns that conflicts in Iran might impact energy supplies.
Although Malaysian ships have recently been granted free passage through the Strait of Hormuz, the risk to oil supply still exists.
But it's not all bad news.
Exports of electronic products have been consistently strong, and local consumer demand continues to sustain, providing some support for economic growth.
However, the problem is that rising commodity prices combined with recent bad weather have put pressure on prices for essentials like RON97 fuel, subsidized diesel, electricity, and food.
As a result, the investment bank has also raised its inflation expectations, increasing the 2026 CPI growth forecast from 1.7% to 2.0%.
Considering the dual pressures of rising inflation risk and slowing economic growth, the bank's analysts believe that Malaysia's central bank might keep the policy interest rate steady at 2.75% after assessing the impact of the conflict.
Honestly, this combination of slowing growth and inflation pressure is a headache for central banks around the world.