Domestic Demand Cushions Malaysia's Economy Amid Global Conflict, Says Economist
KUALA LUMPUR, May 6 (Bernama) -- Domestic demand remains a key buffer for Malaysia's economy amid the ongoing conflict in West Asia, said Affin Group chief economist Alan Tan.
However, he cautioned that reliance on domestic resilience alone may not be sufficient to fully offset weaker exports if global conditions deteriorate further.
“But no doubt, Malaysia's domestic demand is strong. This is evident in tourism, private consumption spending, and the investment drive that we are seeing, especially in Johor data centre developments,” he said.
Tan was speaking during a sharing session at the ASEAN Leadership and Partnership Forum 2026 titled “Strategic Resilience: Navigating the Global Economic and Energy Crisis and Supply Chain Landscape” moderated by CARI ASEAN Research and Advocacy chairman Tan Sri Munir Majid.
In a prolonged scenario where the conflict extends beyond six months and Brent crude prices remain elevated, Tan said fiscal considerations could come into sharper focus, including possible adjustments to fuel pricing policies.
Meanwhile, IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan viewed that global powers appear to be engaging less directly with ASEAN, contributing to slower regional economic integration and requiring member states to navigate external shocks more cautiously.
Malaysia’s use of public transport systems, including buses as a basic necessity, has helped cushion some of the domestic impact, reflecting government efforts to manage cost pressures, he added.
However, he stressed that policymakers must also consider the broader regional inflation landscape and how shifting price dynamics could influence business growth across Asia.
-- BERNAMA
