2Q 2026 GDP growth of 5.8pc shows Malaysia’s economy remains resilient
Malaysia’s economy remained resilient as preliminary data from the Department of Statistics Malaysia (DOSM) showed that its gross domestic product (GDP) grew by 5.8 percent in the second quarter of 2026 (2Q 2026).
Economy Minister Akmal Nasrullah Mohd Nasir noted that the figure was higher than the 5.4 percent recorded in the 1Q 2026, demonstrating that the country’s economic activity continued to expand despite geopolitical pressures.
“We certainly welcome the 5.8 percent growth on top of the 5.4 percent recorded in 1Q 2026. When we look at economic growth, it is measured against the previous growth base. That is why it shows the economy remains strong and resilient.
“At the same time, it also indicates that the interventions we have implemented have helped ease concerns and significantly mitigate disruptions to economic activity,” he said.
Earlier, in its advance GDP estimates for 2Q 2026, DOSM reported that Malaysia’s economy expanded by 5.8 percent, following the 5.4 percent growth in the preceding quarter.
DOSM said the performance was supported by growth across nearly all economic sectors, except agriculture, which contracted.
Akmal said the achievement also reflected the effectiveness of the government’s interventions in managing the impact of tensions in the Middle East, which have put pressure on oil supplies and prices, as well as potentially disrupting other supplies.
He added that since the conflict began, the government has continuously assessed developments through the National Economic Action Council (MTEN), which meets weekly.
According to him, among MTEN’s key decisions were ensuring the country’s oil supply remains uninterrupted, managing prices to prevent excessive burdens on the public and implementing interventions to prevent industries from shutting down due to disruptions in input supplies.
Tesla reportedly might sell its China business
Tesla is reportedly considering cleaving off its entire business in China to grease the wheels of a merger with SpaceX, according to The Wall Street Journal.
The newspaper reports that “some Tesla executives have been told to prepare for a separation of the China business,” which could include a “spinoff, sale or closure,” citing unnamed sources. The company reportedly would be able to do this fairly quickly because CEO Elon Musk had already tasked executives to prepare for a split in the event that Beijing invades Taiwan.
Separating China from Tesla’s global operations could make it easier to integrate the company into SpaceX, which is a defense contractor that has to follow strict rules around citizenship and national security. That would also be a major concession. China has grown to dominate Tesla’s business, not only as a market for its vehicles, but as a production hub that serves Asia more broadly, and also Europe.
India’s economic growth may moderate in H2 FY27
India’s economic growth will likely moderate in the second half of FY27 due to a high base effect; however, growth may strengthen to around 7.2 percent in FY28, says ICICI Bank. The Monetary Policy Committee (MPC) unanimously kept the repo rate unchanged at 5.25 percent, retaining its neutral policy stance, which is in line with market expectations. Further, as the central bank’s growth and inflation projections saw only marginal revisions of 0.1 percentage point, the private lender noted forecasts for the second half of FY27 remain broadly unchanged.
For the domestic economy, the lender expects growth to be lower in H2 than in H1 on a high base, and thus the Reserve Bank of India (RBI) would be keen to see how actual growth outcomes pan out in the coming months. It noted, despite concerns that global macroeconomic volatility would weigh on India’s economy, the impact has been limited, with most high-frequency indicators pointing to robust growth in the first quarter and sustained momentum in the second quarter. Barring the PMI, most key indicators suggest the economy is on an improving growth trajectory.
“Within the domestic economy, growth is expected to be lower in H2 than in H1 on a high base and thus RBI would be keen to see how actual growth outcomes pan out in coming months. Given the far improved high-frequency indicators, we expect FY27 growth at 6.9 percent with growth settling closer to 7.2 percent in FY28,” it said.
Indonesia’s financial centre must grow
Indonesia’s parliament approved legislation(Opens in new window) last month establishing international financial centres under the Pusat Finansial Internasional Indonesia (PFII) framework. The aim is to permit foreign-currency transactions and offer tax concessions to attract firms to conduct business. Bali has been discussed as a possible site – although none had been formally selected when parliament voted.
Under President Joko Widodo, Indonesia had already offered tax incentives for a planned financial centre in the intended new Indonesian capital Nusantara(Opens in new window), while the Nusantara Capital Authority signed an agreement(Opens in new window) with the Dubai International Financial Centre (DIFC) to cooperate on its development. The public account of PFII does not explain how this earlier initiative relates to the new framework.
A decision on location should follow a clearer account of the business PFII is meant to host. Details released after the vote describe a dedicated supervisory board and specialised dispute-resolution arrangements. These features may improve PFII’s appeal, but they do not explain its commercial role or what firms would gain.
Before borrowing the features of foreign centres, Indonesia needs to define PFII’s role. A separate regime can reduce uncertainty if contracts are enforceable and regulation predictable. Firms also need confidence that disputes will be handled fairly.
Even so, these arrangements cannot produce sustained activity unless firms see a commercial advantage in using the jurisdiction. Tax concessions may help at the outset, though market depth develops through repeated business and the relationships built around it.
Hong Kong and Singapore followed different paths, but both built on existing commercial functions. Hong Kong’s entrepôt economy and business networks preceded its rise as the leading offshore renminbi centre, a role sustained by the free movement of capital. Singapore relied more heavily on public intervention. The government established the Asian Dollar Market in 1968 and kept offshore foreign-currency business separate from domestic banking, before liberalising as supervisory capacity improved and local banks strengthened. Policy set the pace, while demand came from Singapore’s place in regional trade and finance.
DIFC shows that state-led development need not take generations. Established in 2004, it operates under a common-law framework with its own regulator and courts. The legal structure mattered, although it operated in a city serving regional commerce and well connected to international markets, with sustained government backing and professionals willing to move there. By 2025, DIFC hosted just over 1,000 regulated firms and its workforce exceeded 50,000(Opens in new window). Its growth owed as much to Dubai’s established commercial role as to the legal design.
Digital finance help rebuild trust in the economy: Sri Lanka
Economic crises leave behind more than debt. They also weaken confidence: in institutions, in the currency and, sometimes, in the financial system itself. Sri Lanka has spent much of the period since 2022 attempting to restore that confidence following the most severe economic crisis in its post-independence history.
By 2026, shortages and long queues no longer define everyday life as they once did. Economic growth has returned, inflation has moderated from its crisis-era highs and foreign-exchange reserves have improved. Nevertheless, the recovery remains incomplete, while many households continue to feel the effects of higher taxes, living costs and reduced purchasing power.
This gives fintech a particular role in Sri Lanka. Its value is not simply about making payments more convenient. Digital finance can help lower transaction costs, bring more activity into the formal economy and create a clearer connection between citizens, businesses and institutions.
According to the International Monetary Fund (IMF), Sri Lanka’s economy grew by 5 percent last year, although growth is expected to slow to approximately 3 percent this year. The country’s nominal gross domestic product (GDP) is projected to exceed $100billion, while GDP per capita is expected to remain above $4,500.
Colombo remains the country’s financial and commercial centre. Major institutions include the state-owned Bank of Ceylon and People’s Bank, alongside Commercial Bank of Ceylon, Hatton National Bank and Sampath Bank.
Sri Lanka’s economy is supported by services, manufacturing, agriculture, tourism, apparel exports and remittances. Its large overseas workforce is particularly important, with money sent home providing households with income while contributing foreign currency to the wider economy.
During the economic crisis, Sri Lanka’s difficulties were highly visible. Fuel, medicine and imported goods became scarce. Power cuts disrupted households and businesses. The collapse of foreign-exchange reserves contributed to currency depreciation and rapidly rising prices.
Fintech could not resolve these structural problems. However, the crisis demonstrated why efficient financial infrastructure matters. When households and businesses are under pressure, delays, high transaction costs and dependence on physical cash create additional burdens.
Sri Lanka entered the crisis with several important pieces of digital-payment infrastructure already in place. Since then, the challenge has been to encourage more people and merchants to use them consistently.
Japan’s economy minister offers sanguine view
Japan has seen only moderate rises in consumer prices so far with the pass-through of higher costs from the Middle East remaining limited, Economy Minister Minoru Kiuchi said on Tuesday, offering a sanguine view on inflationary risks.
The assessment contrasts with that of the Bank of Japan, which last week issued its strongest warning to date on the risks of inflation overshooting its 2 percent target.
“The overall consumer price ndex rose 1.7 percent year-on-year in June, showing only moderate rises,” Kiuchi told a news conference, when asked about the BOJ’s warning.
“We do need to be vigilant to the possibility that costs could be gradually passed onto food and other consumer goods from summer through autumn,” he added.
But average real wages are expected to increase nearly 1 percent during the current fiscal year ending in March 2027, Kiuchi said, stressing the government’s focus cushioning the hit to households from rising inflation through fuel subsidies.
“We hope the BOJ continues to guide appropriate policy to stably and sustainably achieve its 2 percent inflation target,” said Kiuchi, who is known as an advocate of loose monetary policy.
Kiuchi has attended the BOJ’s recent policy meetings including last week and in June, when the central bank raised interest rates to a 31-year high of 1 percent.
At the June meeting, Kiuchi said the BOJ must be held accountable for its decision and respond nimbly if the economy faced “extreme volatility,” a summary of opinions at the meeting showed, remarks markets saw as signalling the government’s reservations over the central bank’s rate-hike plans.