KUALA LUMPUR: The World Bank has raised its 2026 growth forecast for Malaysia to 5.1 per cent but warned that a potential reversal in the global artificial intelligence (AI) boom could pose a key downside risk to the economy.
The upward revision of 0.7 percentage points from its previous projection reflects stronger-than-expected economic activity in the first half of the year, with domestic demand expected to remain the main driver of growth.
Economists said Malaysia should leverage the current AI investment boom to strengthen capabilities that can support the economy even if global AI activity slows.
Universiti Teknologi Malaysia associate professor of property economics Dr Muhammad Najib Razali told Business Times that the country should prioritise moving up the semiconductor value chain.
