Malaysia sees 2026 as a year of ‘execution’ as Anwar administration tries to lock in policy gains

“2026 is going to be about how we deliver RMK13,” YB Akmal Nasrullah Mohd Nasir told Fortune ahead of the Forum Ekonomi Malaysia summit on Feb. 5. “It’s a higher chance of success compared to trying to come up with a new policy direction,” he added later. “Two years is quite a short runway.”

Malaysia must hold general elections no later than February 2028, where voters will decide whether to extend the mandate of current Prime Minister Anwar Ibrahim and his Pakatan Harapan governing coalition. 

Akmal and his ministry are now pushing MyRMK, a “digital system” to track progress under RMK13. “We’re trying to address issues with a whole-of-government approach,” he said. “I’m trying to ensure that those who are supposed to deliver will be tracked, so it’s not just ‘missing in action’.”

He expressed hopes that “discipline” might give RMK13 longevity beyond any one administration, and give them “enough commitment to stick to the plan.”

Malaysia is entering 2026 on a solid footing. The country’s economy grew by 4.9% in 2025, following 5.1% growth the previous year. Unemployment fell to 2.9%, the lowest rate in a decade; the Malaysian ringgit is also at its strongest level in five years. 

Still, Akmal acknowledged that 2025 was “challenging.” In April, the U.S. imposed 25% tariffs on Malaysian goods, rattling the country’s export-led economy. After months of negotiations, both sides reached a deal: Malaysia reduced tariffs on certain U.S. products in exchange for Washington lowering its duties to 19%, with exemptions for key Malaysian exports such as aviation components and electrical equipment.

Malaysia’s strength in semiconductor and electrical equipment manufacturing has since helped the country’s exports amid a global AI boom. The country’s trade hit a record high last year, surpassing 3 trillion Malaysian ringgit ($780 billion). 

Economists are optimistic that Malaysia can deliver a repeat strong performance in 2026. HSBC ASEAN economist Yun Liu forecast in a Jan. 26 report that Malaysia’s economy will grow by 4.6% in 2026, and pointed to strong performance in the electrical equipment and tourism sectors, as well as sound government policies. 

Nomura economists were even more bullish, suggesting in December that Malaysia’s economy might grow by 5.2% in 2026, thanks to infrastructure projects under RMK13. 

Malaysian officials hope the country can serve as neutral territory in a more geopolitically complex world.  “We are not China, not the U.S…and that gives us a strategic position, both in terms of geopolitical positioning, as well as supply chain positioning,” YB Tuan Liew Chin Tong, Malaysia’s deputy minister of finance, said at the Forum Ekonimi Malaysia on Feb. 5.

“Malaysia is open for investment, because we believe we have a competitive advantage,” Akmal said to Fortune. “This is the best time to consider Malaysia as your [investment] destination…given our approach of being friendly to everyone and focusing on economic prosperity.”

Chips, Johor and energy

A central plank of Anwar’s plan for the next five years is the growth of new “Made by Malaysia” products, particularly in high-value sectors like semiconductors. Malaysia already plays a significant role in chip assembly and testing but wants to move further upstream into areas such as design.

“We are focusing on high-growth, high-value industries,” Akmal told Fortune.

Last year, Malaysia signed a 10-year licensing deal with Arm Holdings, the British semiconductor firm, granting access to chip design blueprints and setting up the company’s first Southeast Asian office in Kuala Lumpur. The agreement also includes training programs for 10,000 local engineers, helping Malaysia tackle a persistent talent gap in advanced manufacturing.

Akmal said the country needed to “upgrade” its talent as it strives to climb up the value chain, a concern echoed by business leaders. 

“Capital can be injected by a government or investor, but talent is the one [thing] we need to build,” Ooi Ching Liang, general manager of business development at SkyeChip, a Malaysian chip design startup, said at the Forum Ekonomi Malaysia on Feb. 5. While Malaysia is training local workers, it can take “many iterations of product cycles to pick up experience,” he added, forcing companies like SkyeChip to look overseas for talent. 

Another pillar of Malaysia’s industrial push is the Johor–Singapore Special Economic Zone (SEZ), launched to attract high-tech investment along the border. The zone allows companies to tap Singapore’s financial and legal ecosystem while accessing Malaysia’s lower costs and larger land base.

Almost one third of all approved foreign direct investment into Malaysia in the first three quarters of 2025 went to the state of Johor, and Akmal–a Johor native–notes that it may soon overtake Selangor, traditionally the top destination for foreign investment, this year.

Akmal, who is one of Malaysia’s youngest ministers at just 39, is just a few months into his new position, having been appointed to the role of economy minister last December as part of a broader cabinet reshuffle. He previously served as energy minister, which gives him an understanding of some of the resource needs for a booming AI and data center sector. 

In his conversation with Fortune, Akmal reiterated pledges that Malaysia will stop using coal by 2044, and be net zero by 2050, and added that the country is “exploring the potential” of adopting nuclear power. He’s also optimistic that the ASEAN power grid–a system of electrical transmission crossing the various countries of Southeast Asia–will get off the ground soon. 

“Water and energy are no longer just utilities or resources; they are the engine of economic growth,” he says. “AI is what the world is looking at now, but the fundamental requirement will be having good resources.”