Malaysia’s Economic Outlook for 2026: Tourism, Trade and Consumer Spending to Lead Growth

Published on December 28, 2025

Malaysia’s economic growth is projected to range between 4.3% and 4.5% in 2026, thanks to domestic consumer spending, active services, and a better labor market, according to the report by IPPFA Sdn Bhd, the country’s economic outlook report for 2026. Two principal catalysts will drive Malaysia’s economy in 2026: the current implementation of the 13th Malaysia Plan, or RMK-13, and the much-awaited “Visit Malaysia in 2026” campaign, which is expected to greatly impact sectors such as tourism, retail, and services, thus taking Malaysia to a brighter future in terms of economic growth.

Visit Malaysia 2026: A Major Driver for Tourism and Consumer Spending
A central pillar of Malaysia’s projected growth is the Visit Malaysia 2026 campaign, designed to promote the country as a global tourism destination. Haza’a predicts that the campaign will inject between RM13 billion and RM21 billion into the economy, primarily through private consumption. This influx is expected to increase household spending power by approximately 1.0% to 1.7%. These effects will extend beyond tourism, benefiting sectors like retail, food services, transportation, and local businesses, creating a ripple effect throughout Malaysia’s economy.

Tourists from all over the world, particularly from Europe, the Middle East, and neighboring ASEAN countries, are expected to flock to Malaysia’s diverse cultural and natural attractions. The Visit Malaysia 2026 campaign is poised to transform the country’s tourism sector, significantly enhancing travel-related services, local commerce, and hospitality offerings, while fostering greater economic integration across various regions.

Economic Spillover Effects from Tourism
The economic benefits of the Visit Malaysia 2026 campaign will not be limited to just the tourism industry. As more international visitors arrive, the hospitality sector, including hotels, restaurants, and transportation services, will see increased demand. This surge in tourism-related activities will generate more job opportunities, further stimulating consumer spending and driving the growth of small businesses, particularly those in the service industry.

Notably, the tourism-driven increase in consumer spending is expected to benefit service-sector workers, including those in retail, food, and hospitality, as well as small local enterprises. The effects will be widespread, fostering a more balanced and sustainable growth model, supported by a stable labor market and steady income growth. Additionally, a moderate inflation rate approaching 2% is expected to help stabilize consumer purchasing power, mitigating potential economic shocks.

Strong External Trade Performance Fuels Economic Growth
In addition to the tourism sector, Malaysia’s external trade performance has been another significant factor contributing to the country’s economic growth. Malaysia’s exports have surged in 2025, reaching RM1.45 trillion for the period from January to November. Total trade during the same period reached RM2.77 trillion, reflecting robust growth in both exports and imports. These figures mark the fifth consecutive year Malaysia has exceeded the trillion-ringgit trade threshold.

Exports have been particularly strong, with key sectors such as semiconductors, pharmaceuticals, and optical products leading the charge. Malaysia’s trade surplus for 2025 stood at RM132.5 billion, a 10.7% increase over the previous year. The growth in exports has been driven by strong global demand, especially in markets such as the United States, China, and Europe, which collectively account for nearly 68.5% of total exports.

Malaysia’s trade with countries having free trade agreements (FTA) also showed positive growth, especially with markets like the United Arab Emirates, Chile, the United Kingdom, and Canada. More notably, exports to emerging markets in Africa and Central Asia have experienced significant growth, with countries like Yemen, Tanzania, and Uzbekistan showing impressive increases in trade volume.

Impact on Travel and Tourism in Malaysia
The economic momentum driven by both trade and tourism will have a direct impact on the travel and tourism sector. Malaysia has long been a popular destination for travelers, offering a unique blend of modern cities, rich cultural heritage, and beautiful natural landscapes. With the launch of the Visit Malaysia 2026 campaign, the country is set to position itself as a leading destination in Southeast Asia, attracting millions of tourists and boosting its global appeal.

Tourism is not only expected to increase Malaysia’s income but will also play a crucial role in enhancing its international profile. Visitors are likely to be drawn to the country’s iconic attractions, such as the Petronas Twin Towers in Kuala Lumpur, the historical sites in Malacca, and the stunning beaches of Langkawi and the Perhentian Islands. Additionally, Malaysia’s rich cultural diversity, delicious cuisine, and vibrant festivals will make it a must-visit destination for international travelers.

Opportunities for Regional and International Connectivity
As Malaysia continues to improve its infrastructure and tourism facilities, regional connectivity is also expected to play a key role in driving tourism. The development of international airports, rail networks, and road systems will enhance Malaysia’s accessibility to global travelers, making it easier for tourists from Asia, Europe, and the Middle East to visit the country.

Furthermore, Malaysia’s emphasis on sustainable tourism practices aligns with global trends, attracting eco-conscious travelers who seek responsible travel experiences. With initiatives in place to preserve natural resources, promote green energy, and protect cultural heritage sites, Malaysia is positioning itself as a leading destination for sustainable tourism in the region.

A Bright Future for Malaysia’s Economy

With such positive outlook for 2026, Malaysia is ready to have yet another great year of economic expansion. This is due to the country’s growing tourism industry, strong export market, and strategic investments in infrastructure. The Visit Malaysia in 2026 program is poised to play an important part in promoting Malaysia and attracting millions of visitors and billions of dollars to the economy. This is while the Malaysian government’s support for sustainable development and cooperation in the region is set to position Malaysia as the leading country in tourism and trade in Southeast Asia.