2H2026 Outlook (by MARC Ratings Berhad)

 

The US continues to outperform most advanced economies. This is supported by artificial intelligence (AI)-led investment, resilient domestic demand and structural advantages. Meanwhile, China remains on track to achieve its revised growth target despite persistent weakness in domestic demand. This is supported by resilient exports and policy shifts towards industrial upgrading and advanced manufacturing. 

Following stellar 1H2026 gross domestic product (GDP) data, MARC Ratings has upgraded its full-year GDP forecast to 5.1% from 4.4% for Malaysia. Global geopolitical uncertainties have effectively catalysed growth drivers in Malaysia, accelerating supply-chain investments and infrastructure development. Record-high inward tourism, and hydrocarbon exports are other factors. These tailwinds complement ongoing strength in foreign direct investment (FDI). In addition, the semiconductor and AI investment upcycle, and resilient private consumption contribute to the positivity.

 

Source: https://de.wikipedia.org 

MARC Ratings expects the ringgit to trade within the 4.00–4.15 USDMYR range by end-2026, revised from the prior forecast of 3.98–4.07 USDMYR. Record-high exports and sustained FDI inflows should continue to provide support to the currency. The ringgit was broadly stable in 1H2026 and ranked as the second-best performing currency among major Asian peers in 1H2026 (trailing only the Chinese yuan). 

Malaysia is expected to continue attracting foreign bond inflows in 2H2026, supported by stable domestic fundamentals and ongoing institutional reforms. However, a more hawkish Fed outlook may moderate the pace of inflows. On the monetary policy front, MARC Ratings’ baseline expectation is for the Overnight Policy Rate (OPR) to remain unchanged. However, ongoing geopolitical risks could keep oil prices elevated and pressure inflation. 

Across ASEAN+3, inflationary pressures, tighter monetary policy expectations and a weaker sovereign credit outlook in selected markets weighed on bond market performance during 1H2026. Indonesia recorded the largest increase in its 10-year yield (+104.9bps), followed by the Philippines (+83.9 bps) and South Korea (+70.6 bps), while China's 10-year government bond yield declined by 11.4 bps amid subdued inflation and a dovish monetary policy outlook. Most regional yields are expected to remain biased upwards in 2H2026 as central banks maintain a cautious stance and investors continue to monitor volatile inflation dynamics and sovereign credit developments. 

Investors and FDIs have serious problems in planning short or medium-term investments. The Straits of Hormuz and the Red Sea carry the possibilities of uncertain, volatile environment. The U.S. especially has to extricate itself from the quagmire of never-ending wars. But Trump has no clue or solutions. So, be cautious in these uncertain times. 

Reference;

MARC Ratings Berhad, Press Announcement, 2H2026 Outlook: Navigating Higher Global Rates, 20 July 2026