Malaysia’s economy grows 5.3pc
Malaysia’s economy grew 5.3 percent from a year earlier in the third quarter, slowing from the previous three-month period, official advance estimates showed on Friday.
In the second quarter, gross domestic product expanded 6 percent. During the July to September period, growth was recorded in all economic sectors except for mining and quarrying, which declined 4.9 percent from a year earlier, the statistics department said in a statement. Expansion in the quarter was driven by the services sector which rose 5.4 percent, while manufacturing activity grew 7.5 percent, backed by export-oriented industries, the department said. The construction sector rose 6 percent, supported in part by rising data centre development projects, it said. Malaysia, a regional data centre hub, has benefited from a global boom in artificial intelligence infrastructure that has driven demand for its tech products and semiconductors.
The government last week raised 2026 growth projections for the second time this year, with the economy expected to expand close to the upper end of a 4.8 percent to 5.3 percent forecast range.
It estimates annual economic growth of between 4.2 percent and 5.2 percent in 2027. The central bank has held its main policy rate steady since May last year, when it was cut to 2.75 percent amid global tariff uncertainties.
China’s AI industry brings both gains and challenges
China is attracting global interest and achieving record-breaking export growth as a trailblazer in the field of artificial intelligence (AI). However, the sector’s growing importance for China’s economy is a double-edged sword. The delicacy of the ongoing AI race, coupled with its national security implications, could lead to curbs on the sharing of certain technologies, casting new doubt on the frontier as an economic driver.
China’s exports are growing at a phenomenal rate, recording a 36.3 percent year-on-year boost in September to reach $447.18 billion. That’s the highest growth level for Chinese exports since 2021, and even then figures were somewhat unreliable due to the disruption caused by the COVID-19 pandemic.
September’s figures extended a positive run. China’s exports grew 25 percent year-on-year in August. In both months, high-tech trade was a critical contributor to the surging growth. China’s semiconductor exports grew more than 108 percent over the past month, and automatic data processing machine shipments, recorded a boost of 55 percent.
The AI industry has been providing economic tailwinds for China, bolstered by government initiatives to support the development of the technology domestically. In turn, China’s tech-focused exports have helped to support the national economy. However, it appears that China is mulling placing new bans on exports focusing on emerging technologies. That includes AI as well as biotechnology and solar power.
In recent days, China has unveiled a draft plan to establish a fresh series of export bans that will impact 14 different forms of technology. The notice, issued by China’s Ministry of Commerce and Ministry of Science and Technology, proposes bans or restrictions that cover 40 technologies in total. The Ministry of Commerce has claimed that the implementation of export bans is necessary to reinforce security while preventing misuse and abuse.
If implemented, those curbs could significantly impact the nation’s ongoing export boom. Critically, the restrictions would see domestic AI models with parameter counts of 2 trillion or more excluded from exports. Parameter counts are important measures of the learning capacity of models, and controlling higher-end models is likely to be China’s way of maintaining an edge in a highly competitive buildout. Both of China’s leading AI models – Moonshot AI’s Kimi K3 and Alibaba’s Qwen 3.8-Max – exceed parameter counts of 2 trillion, meaning that their export could be banned entirely.
India’s economy resilient
Secretary, Department of Economic Affairs, Anuradha Thakur on Tuesday highlighted India’s experience as a compelling example of how a strong macroeconomic foundation can support economic resilience and sustained growth amid global uncertainties.Read Economics
In a special address on ‘Financial Stability’ on the second day of RBI’s SAMVAD 2026, Thakur said India’s fiscal trajectory has been credible and its flexible inflation targeting has anchored inflationary expectations.
“India faces the present challenging global scenario from a position of macroeconomic stability,” the finance ministry official added.
Setting the context for the panel discussion, RBI Deputy Governor Poonam Gupta noted that financial stability has emerged as a policy objective in its own right, and the policy lens has moved from individual institutions to the system as a whole, covering not only banks but also non-banks.
Panellists Ajay Seth, Chairman, IRDAI, Yangchen Tshogyel, Governor, Royal Monetary Authority of Bhutan, Athanasios Vamvakidis of the IMF and Paul Jackson of Invesco noted that there was a need to stay alert as crises were now coming quicker and were more intense.Read Daily News
They said lessons from past crises regarding the ill effects of financial reengineering should not be forgotten even as innovation in the financial sector is encouraged, while risks posed by climate change, the increasing role of non-bank financial intermediaries and fintechs, and the present non-collaborative phase of geopolitics should be adequately factored in.
Gaps in data sharing and concerns arising out of increasing use of AI agents should be addressed and care taken to build resilience not only in balance sheets of banks but also in those of corporates and households, the panellists added.
Samvad 2026 — an international seminar for central banks — was inaugurated by RBI Governor Sanjay Malhotra on Monday, delivering the welcome address and Union Finance and Corporate Affairs Minister Nirmala Sitharaman gave the keynote address.
The two-day event brings together Central Bank Governors, senior policymakers, representatives from international organisations and subject matter experts from across the world to discuss emerging challenges and opportunities facing the global financial system.
Indonesia economy strong on paper
Two years into Prabowo Subianto’s presidency, the economy has proven resilient and even accelerated under global pressure, but many Indonesians struggle to secure stable incomes or better jobs, while the rupiah’s depreciation and a dramatic stock market decline reflect a lack of investor confidence.
Prabowo assumed office in late 2024, and under his leadership Indonesia’s gross domestic product expanded by 5.11 percent in 2025 and by 5.45 percent in this year’s first half, well above the 5 percent rate the country had become accustomed to since 2013.
The acceleration in GDP growth was “commendable given the challenging external environment,” Economist Intelligence Unit (EIU) analyst Qi Hang Tay told The Jakarta Post on Monday.
Prabowo’s two years in office were dogged by continuous global turbulence, beginning with last year’s tariff threats from the United States that hurt Indonesian exports and this year’s Iran war that pushed up global oil prices and hence Indonesia’s energy import costs.
“However, whether [the higher GDP growth] counts as an ‘achievement’ is debatable. While the administration has maintained macroeconomic stability, this largely reflects a continuation of existing trends rather than a significant structural breakthrough or a new phase of accelerated growth,” Tay said.
The growth had not translated into “sufficiently strong improvements” in household incomes and employment opportunities, Tay explained.
“Many Indonesians continue to face difficulties securing well-paying jobs, particularly in the formal sector, while wage growth has struggled to keep pace with their expectations,” elaborated the analyst.
Strength in Japanese loan demand
Major Japanese banks are seeing increased demand for funds among corporate borrowers compared with three months , a central bank survey showed on Thursday, indicating that recent interest rate hikes have yet to hamper lending.
The data, which comes ahead of the Bank of Japan’s policy meeting next week, reinforces the dominant view in the market that it will continue to raise interest rates from 1.25 percent currently to lessen the risk of inflation going beyond its target.
“The economy’s overall resilience to higher interest rates may allow the BOJ to hike its policy rate beyond 1.75 percent to prevent further weakening of the yen” and the de-anchoring of inflation expectations, said Shigeto Nagai, head of Japan economics at Oxford Economics.
In the survey conducted from September 9 to October 13, a diffusion index measuring the ratio of major banks that saw corporate fund demand rise versus those seeing demand shrink stood at +3, compared with -1 in a survey three months earlier.
The positive reading indicates more banks saw corporate fund demand increase compared with those that saw demand fall.
It follows the BOJ’s “tankan” quarterly survey, released on October 1, which showed there are more firms that believe funding conditions are loose compared with those who see conditions as tight.
The BOJ raised its policy interest rate to 1.25 percent, a 31-year high, on September 18 and signalled a pivot towards a policy focusing on mitigating the risk of inflation overshooting its 2 percent target. Analysts expect another hike in December or January.
Lending conditions are becoming an important factor in predicting the timing of the BOJ’s next rate hike. The bank has said it will scrutinise how past increases affect corporate funding to assess how close its rate is to a level it deems neutral to the economy.
“Even after last month’s rate hike, financial conditions remain accommodative” as seen in still-low real borrowing costs and strong growth in bank lending, BOJ Deputy Governor Ryozo Himino said on Wednesday — comments that signal readiness to raise rates further.
Markets will also focus on how the BOJ describes financial conditions in a quarterly outlook report due after its two-day meeting ending on October 30 for clues on how far it could raise rates.
Japanese Prime Minister Sanae Takaichi’s administration has toned down its criticism of the BOJ’s rate-hike stance but some analysts say pressure may grow again if rising borrowing costs hurt smaller firms.
Economy Minister Minoru Kiuchi, seen as a reflationist ally of Takaichi, said on Tuesday he hoped to attend the BOJ meeting next week as one of the government’s two representatives.
A summary of opinions at the BOJ’s September meeting showed a government representative urging the central bank to tread cautiously in further rate hikes.
“Whether the tone of the government representative changes relative to the September meeting will be an important clue as to the extent to which the administration has shifted toward a stance that respects the BOJ’s independence,” said Ayako Fujita, chief economist at JPMorgan Securities Japan.
| Sri Lanka Indicators | ||||||
|---|---|---|---|---|---|---|
| Details | Last | Previous | Highest | Lowest | Unit | Reference |
| Currency | 332 | 332 | 372 | 93.87 | – | Oct/26 |
| Stock Market | 19984 | 20059 | 63362 | 0 | points | Oct/26 |
| GDP Annual Growth Rate | 4.2 | 5.1 | 16.12 | -17.1 | percent | Jun/26 |
| Unemployment Rate | 4 | 3.7 | 16.6 | 3.7 | percent | Jun/26 |
| Inflation Rate | 8 | 8 | 67.4 | -4.2 | percent | Sep/26 |
| Interest Rate | 8.75 | 8.75 | 15.5 | 4.5 | percent | Sep/26 |
| Balance of Trade | -674 | -1018 | 110 | -1383 | USD Million | Aug/26 |
| Current Account | -986 | 704 | 948 | -1695 | USD Million | Jun/26 |
| Current Account to GDP | 1.6 | 1.2 | 1.7 | -19.3 | percent of GDP | Dec/25 |
| Government Debt to GDP | 91.6 | 95.5 | 114 | 16.3 | percent of GDP | Dec/25 |
| Government Budget | -2.3 | -6.8 | -2.3 | -11.7 | percent of GDP | Dec/25 |
| Corporate Tax Rate | 30 | 30 | 42 | 15 | percent | Dec/26 |