Malaysia Among Six APAC Economies Poised to Outgrow China in 2026

Malaysia is set to outpace China’s real GDP growth in 2026, joining five other major Asia-Pacific (APAC) economies—Taiwan, Singapore, India, Vietnam, and Indonesia—according to Moody’s Analytics. The firm’s latest “Asia-Pacific Outlook: RAMpocalypse Now” cites Malaysia’s growing integration into the artificial intelligence (AI) supply chain as a key support for its momentum.

AI-Linked Economies to Buck the Slowdown

While overall APAC growth is expected to cool in 2026, economies most embedded in the AI supply chain are projected to outperform. Moody’s Analytics expects Taiwan, South Korea, Singapore, and Malaysia to expand faster in 2026 than in 2025, with all but South Korea outpacing China this year.

Economies projected to grow faster than China in 2026:

• Taiwan
• Singapore
• Malaysia
• India
• Vietnam
• Indonesia

Semiconductor Demand Lifts Exports

Sustained demand for semiconductors and tech hardware has bolstered exports from Taiwan, South Korea, China, and parts of Southeast Asia, helping offset weakness elsewhere. Notably, nominal goods exports from South Korea and Taiwan surpassed Japan’s in the first half of 2026 for the first time.

Regional Growth Outlook

Moody’s Analytics expects APAC growth to ease to 4.3% in 2026 from 4.4% in 2025, before slowing further to 3.7% in 2027. Higher prices and tighter monetary policy—partly linked to conflict in West Asia—are likely to weigh on household demand and investment in traditional manufacturing and services.

Monetary Policy Watch

Malaysia and Taiwan have kept policy rates unchanged even as several regional central banks tightened. Moody’s Analytics notes both still have room to raise rates if needed.

What It Means for Malaysia’s P2P and Fintech Ecosystem

• AI supply-chain tailwinds may lift trade flows and capital needs across electronics and related sectors, supporting demand for working capital and supply-chain financing on digital and P2P platforms.
• A steady domestic rate environment is supportive for credit performance, though platforms should monitor potential spillovers from regional tightening and softer consumer demand.
• Export-led growth and semiconductor upcycles could widen deal flow for SME lenders, while heightened macro uncertainty argues for robust risk models and sector diversification.