Malaysia’s economy grew 5.3pc yr/yr in Q1
Malaysia’s economy grew 5.3 percent in the first quarter from a year earlier, official advance estimates showed on Friday, moderating from its pace at the end of 2025 as slowed in some key sectors.
In the final quarter of 2025, gross domestic product had expanded by 6.3 percent, the fastest pace in three years, driven by higher domestic demand, exports and investments.
The rise in the January-to-March period was driven by sustained growth in the manufacturing, services and construction sectors, though momentum has slowed compared to the previous quarter, the statistics department said in a statement.
The mining and quarrying sector declined 1.1 percent in the quarter due to lower production, particularly of crude oil and natural gas.
“Malaysia’s first quarter of 2026 reflects an economy that remains fundamentally resilient, even with the rising global uncertainties, particularly elevated oil prices following geopolitical tensions,” Chief Statistician Mohd Uzir Mahidin said.
Final first figures are expected to be released on May 15.
Last month, the central bank slightly lifted its growth forecast for 2026 to 4 percent to 5 percent, from an earlier projection of 4 percent to 4.5 percent, supported by household spending, steady exports and tourism.
The economy expanded 5.2 percent last year, surpassing expectations as the country posted record values of trade and approved investments.
However, Bank Negara Malaysia has warned that supply disruptions and higher fuel prices caused by prolonged conflict in the Middle East would pose risks to its growth and inflation outlook.
Separate data released on Friday showed consumer prices rising 1.7 percent in March from a year earlier, matching the median forecast by analysts and ticking up from the 1.4 percent increase the previous month.
China keeps benchmark lending rates unchanged
China held its benchmark lending rates unchanged for an 11th straight month, keeping its powder dry as policymakers weigh the economic fallout from the Middle East war against resilient growth at home and fading deflationary pressure that has given Beijing less urgency to act.
The People’s Bank of China kept the loan prime rate, or LPR, unchanged on Monday, as surging global oil prices amid escalating Middle East tensions pushed up energy prices and clouded the growth outlook.
The one-year LPR, a benchmark for new loans, was kept at 3.0 percent while the five-year LPR, a reference for mortgage rates, was unchanged at 3.5 percent.
The decision came after the world’s second-largest economy grew 5 percent in the first quarter, accelerating from 4.5 percent in the prior quarter, and at the top end of its full-year target range. Beijing lowered its growth target for 2026 to a range of 4.5 percent to 5 percent, the least ambitious goal on record since the 1990s.
China’s factory-gate prices also rose for the first time in more than three years, climbing 0.5 percent in March from a year earlier, signaling that import-cost pressure has started seeping into the economy. Consumer inflation logged its biggest jump in more than three years, rising 1.3 percent in February, before easing to 1 percent in March.
The upbeat growth at the start of 2026 has reduced pressure for additional stimulus, prompting economists to push back expectations for interest rate cuts.
Policymakers will likely take a “wait-and-see” approach, with rising inflation reducing the PBOC’s incentive to cut policy rates or roll out major easing in the near term, said Yu Song, chief China economist at UBS Securities.
“The government may also need time to assess the impact of external uncertainties amid Middle East conflict,” Song added.
The PBOC said that it would maintain a “supportive” and “moderately loose” monetary stance this year to shore up growth, while keeping its currency stable.
Speaking at an International Monetary Fund meeting in Washington last week, China’s central bank governor Pan Gongsheng warned that rising geopolitical tensions, protectionism, and trade barriers have weighed on global growth and fuelled financial market volatility. Pan urged deeper international policy coordination to safeguard macroeconomic and financial stability.
Lan Fo’an, China’s finance minister, also reiterated Beijing’s call to expand domestic demand and boost consumption, while providing more “global public goods” for shared benefits.
Hormuz risk for Japan’s economy?
Japan’s economy is facing the Iran crisis from a position that is stable on paper but still fragile beneath the surface. Since late February, the war involving Iran and the disruption around the Strait of Hormuz have pushed oil markets back to the center of the global outlook. About a fifth of global oil and LNG flows normally pass through the strait, and Brent has been trading near $100 a barrel amid doubts over any permanent ceasefire.
For Japan, the economic implications are immediate. Real GDP grew 0.3 percent quarter on quarter in October-December 2025, and 1.2 percent for the full year, while the February 2026 Consumer Price Index was up 1.3 percent, and unemployment stood at 2.6 percent.
Yet household spending in February fell 1.8 percent in real terms, and consumer confidence in March dropped to 33.3, showing how little room there is for another energy-import shock.
But is the outlook really as bleak as those fears suggest? Mariko Mabuchi, an economic analyst, and Ryoji Musha, president of Musha Research and a veteran strategist formerly at Deutsche Securities, both suggest otherwise. Mabuchi looks beyond the noise to what markets are signaling, while Musha argues that investors are justified in not pricing in a full-scale oil shock.
Indonesia’s middleman economy
Walk through any Indonesian city, and the commerce hits you before almost anything else. Not the formal kind, not malls or office towers, but something older and more intimate. In Tanah Abang, Jakarta’s vast textile market, tens of thousands of traders work in a building that functions less as a marketplace than as a small civilisation – layered, hierarchical, and governed by codes of trust and obligation that outsiders cannot easily read.
This is the ecosystem that built modern Indonesia, a nation whose vast economy is organised around moving goods, and increasingly vulnerable as a result.
The Indonesian trader is the country’s main protagonist and its moral centre. Anthropologist Clifford Geertz, writing from the markets of East Java in the 1960s, saw in the peddlers, the merchant class, a figure as central to the Indonesian social imagination as the yeoman farmer was to Jeffersonian America. Becoming a successful middleman was ambition in its purest form. Generations of Indonesians grew up understanding that real prosperity meant positioning yourself cleverly in the chain between the person who made something and the person who wanted it. For most of modern Indonesian history, that understanding held.
The word pengusaha, most commonly understood as an equivalent of ‘entrepreneur’, is defined in the national dictionary not as someone who creates a venture or brings something new into existence, but simply as a person who works in trade. To become a pengusaha remains, for most Indonesians, the highest economic aspiration – higher than being a professional or salaried worker, the karyawan – and yet the word carries no implication whatsoever of making anything new. Indonesians who accumulate enough capital to stop working for someone else almost invariably move into trade.
Nepal’s digital economy
Two recent studies on Nepal’s digital transformation paint a picture of robust growth but somewhat fragile foundations. Nepal’s digital economy is expanding quickly but the bedrock needed to support secure, interoperable digital public infrastructure (DPI) is still taking shape.
One paper charts the rapid rise of digital payments, mobile wallets, QR code transactions and online banking, showing how digital entrepreneurship is changing commerce. Yet it also highlights the fragility beneath that growth.
The country suffers from uneven broadband access, gaps in cybersecurity, and the absence of integrated service platforms. These platforms would allow citizens to transact with the government through a single, reliable gateway.
In “Towards robust digital infrastructure for sustainable digital economy development of Nepal,” the authors argue that Nepal’s digital economy will only mature if the country strengthens its infrastructure, harmonizes regulation and invests in digital literacy.
The second paper, focused on Nepal’s National Identity Card, reaches a similar conclusion from a different angle. Despite enrolling more than 17 million people, the NID is connected to fewer than ten services and many citizens have not collected their cards.
The study asks what system would allow a foundational identity system to support cross‑domain services without creating exclusion or surveillance risk. Its answer is a federated, open‑standards‑based identity stack with strong consent controls and citizen auditability.
In “Towards a Unified Civic Identity Stack: Integrating Nepal’s National Identity Card (NID) with Cross-Domain Government Services,” the author identifies legal gaps, constitutional constraints and the need for privacy protections that match the scale of what Nepal is trying to build.
Coalition to grow the reuse economy launches : Singapore
A new non-profit coalition has launched in Singapore to accelerate the reuse economy, as the city-state grapples with rising waste volumes and a stuttering transition to a circular economy.
Formed against a backdrop of surging packaging costs linked to the Iran war, the Singapore Reuse Coalition aims to strengthen resource efficiency and economic resilience by promoting returnable, refillable, repair, remanufacture and repurpose systems.
“Reuse is no longer just about waste reduction and circularity — it is a practical hedge against cost shocks,” said Sean Lam, co-founder of refill company Ecoworks and a founding member of the coalition.
It includes Nuryanee Anisah, co-founder of textile upcycling firm Commenhers, Jonathan Tostevin, CEO of reusable container brand Muuse, Lynn Kee, director of leather aftercare firm Dr Bags, and Lionel Dorai, executive director of waste non-profit Zero Waste SG as founding members.
The group is currently developing a white paper on Singapore’s reuse economy, aimed at identifying best practices and addressing structural gaps in the sector.
Globally, reuse systems have attracted just 4 percent of circular economy investment for plastics between 2018 and 2023, compared with 82 percent directed toward recovery and recycling, according to Circulate Initiative.
Singapore generates some of the highest waste volumes per capita in the world, while its domestic recycling rate dipped to a recort low last year.
“Much of the circular economy conversation is still centred on recycling, which continues to attract the bulk of funding. Reuse needs a stronger voice to grow,” Lam said.