AGP Executive Report

Malaysia Economy Watch: Malaysia’s Q2 2026 GDP grew 5.8% (up from 5.4%), with services leading and manufacturing and mining rebounding, while agriculture contracted; inflation also eased to 1.9% in Q2, led by transport and insurance/financial services. Courier Safety & Compliance: Postal Forum soft-launched the Malaysia Courier Safety Passport (MyCSP), a six-module training programme for courier road and workplace safety, with registration open and training set to start in September. Agri-Exports: Deputy agriculture minister urged durian exporters to stick to the existing China phytosanitary protocol and avoid any unapproved “pre-cut” export methods that could jeopardise market access. Halal Market Pressure: Businesses say halal certification is too costly and slow, pushing exporters to buy internationally recognised certificates instead of relying on local processes. Healthcare Manufacturing: Biocon Malaysia received EMA approval for a new Semglee (insulin glargine) fill-finish line, targeting Europe supply from Q2 FY2026-27. Home Appliances Launch: Coway Malaysia debuted its first refrigerator series for its 20th anniversary, expanding beyond wellness into broader home lifestyle solutions.

Malaysia Macro: DOSM says Q2 inflation rose to 1.9% (from 1.6%), led by higher transport, insurance and financial services costs, while headline inflation eased slightly in June. Growth Watch: Malaysia’s economy is estimated to have grown 5.8% in Q2, with services, manufacturing and a rebound in mining driving the expansion; agriculture contracted. Energy & Trade Risk: Malaysia will keep monitoring Iran-US tensions to protect oil supply as Strait of Hormuz disruptions lift global crude prices. Data Governance: DOSM is stepping up preparations for the Statistics Bill 2026, focusing on phased implementation documents, coordination with data owners, and data security. EV & Pricing: Tesla Malaysia raised Model 3 and Model Y prices by about RM1,400–RM3,000, noting it’s outside MITI’s CBU EV price-floor rules via a separate programme. AI Power Demand: A report highlights Asia’s AI data-centre boom pushing electricity demand and turning coal into a key “stopgap,” with Malaysia’s Cyberjaya cited as already seeing strain. Rare Earth Geopolitics: Malaysian lawmakers urged Putrajaya to clarify whether Lynas’ rare earth supply links to the US defence chain could affect Malaysia’s foreign policy stance. Industry & Consumer: Coway Malaysia launched its first refrigerator series as part of its 20th anniversary push beyond wellness into broader home lifestyle solutions. Sports Tourism: Cameron Ultra (CULTRA) 2026 drew 3,600 runners from 33 countries, targeting RM15m in local economic spillover.

Statistics Bill 2026 Rollout: DOSM is preparing for the new Statistics Bill 2026, finalising implementation documents, standing instructions and guidelines to standardise how ministries and data owners manage national statistics under the new legal framework. GDP & Inflation Watch: Malaysia’s economy stayed resilient with Q2 2026 GDP growth of 5.8%, while inflation eased to 1.9% in June, with agriculture the only sector that contracted. Energy Security & Oil Supply: Government officials say they’re closely monitoring US-Iran tensions to protect Malaysia’s oil supply, as Strait of Hormuz disruptions push up global prices. Solar Push for Industry: Gentari deployed a 3.1MWp solar PV system at KLIA2, generating about 4,277MWh annually and cutting roughly 3,310 tonnes of CO2e per year. SME Financing Boost: MBSB Bank and NCIA signed an MoU for up to RM1 billion financing to help export-oriented SMEs expand in the Northern Corridor. Digital Regulation & Trust: MCMC will discuss quantum tech use cases and the cybersecurity risks it brings at IRC 2026, including threats to existing encryption. EV Demand Outlook: BMI says Malaysia is well placed to lead ASEAN EV growth outside Vietnam and Thailand, supported by consumer purchasing power and China-made price competition. Sports Tourism: Cameron Ultra (CULTRA) 10th edition drew 3,600 runners from 33 countries, targeting RM15 million in local economic spillover.

GDP Momentum: Malaysia’s economy grew 5.8% in Q2 2026, up from 5.4% in Q1, with services, manufacturing, mining and construction expanding, while agriculture contracted; inflation also eased to 1.9% in June. Regional Growth Hubs: RHB Investment Bank says high-value activity is concentrated in Selangor, Penang, Johor, Sarawak and Kuala Lumpur—together driving most GDP, exports and approved investments—pushing for more talent, R&D and industry-academia links. Energy Security Watch: Malaysia is studying a national petroleum reserve stock as geoeconomic risks and Middle East tensions raise supply-chain uncertainty. Rare Earths Scrutiny: A Malaysian parliamentary group is reviewing Lynas’ US Department of Defense rare-earth supply deal, while Lynas and JS Link plan a rare-earth magnet factory in Kuantan. Mobility & Property Decarb: Pelaburan Hartanah Berhad signed MoUs to expand EV charging and green building certification across its assets. Digital Regulation: MCMC’s IRC 2026 will focus on implementing Malaysia’s digital rules, including online safety and AI. Transport Disruption: AirBorneo is retiming and adjusting flights, affecting about 4,000 passengers, due to ATR network maintenance and parts constraints. Water Infrastructure: Kelantan’s NRW challenge remains high (~50%); plans prioritise replacing ageing pipelines to boost treated water reaching consumers.

Agri-Food Exports: FAMA targets RM500,000 in potential sales at MIFB 2026 via 10 contract-farming entrepreneur firms showcasing 50 SKUs ranging from coconut products and bananas to tempeh, bird’s nest, vegetables and frozen durians, with business-matching aimed at unlocking export buyers. Infrastructure Resilience: Works Ministry (KKR) is shifting from reactive repairs to risk-based long-term slope and debris-flow mitigation on the Lojing–Gua Musang road, including RM10.4m works such as drainage, resurfacing and a Sabo dam. Critical Minerals & Industry Risk: The IEA warns China’s rare-earth export curbs could endanger US$6.5 trillion of downstream production outside China, with additional graphite controls flagged for EV battery supply chains. Port & Customs Enforcement: Maritime Network backs a MACC–JKDM task force to curb revenue leakages and strengthen enforcement at strategic ports, aiming for clearer procedures and a level playing field. Data Governance: Parliament passed the Statistics Bill 2026 to modernise Malaysia’s national statistical system, replacing the 1965 Act and setting up a National Statistics Council. Energy Security Policy: An economist urges any national petroleum reserve stock to be phased and fiscally prudent, warning costs of unpreparedness can outweigh reserve spending. AI in Industry: Tridiagonal.ai partners with PETRONAS Carigali and IBM to advance TriCipta AI for upstream surface equipment optimisation, maintenance reliability and asset integrity decision workflows. Transport & Mobility: KL’s LaLaport Transportation Hub targets up to 10,000 passengers a day by linking rail, buses and other services near the Hang Tuah interchange. Sports Participation Push: HSN 2026 (Oct 9–11) targets 5.3m Malaysians, using VR and AI-themed programming to drive wider sports and recreation involvement. Tourism Digitisation: Penang tourism players are urged to adopt AI for digital marketing and competitiveness as PDX 2026 opens. Regional Trade Friction: Malaysia discusses steps to resolve shrimp export restrictions to Thailand and pending livestock market access, alongside food security planning amid El Nino risks.

ESSZone Security Boost: Malaysia is tightening security along Sabah’s east coast with new surveillance and assets, including radar-and-camera “Big Eyes” on Ligitan Island, plus upgrades to PDRM marine and special operations capabilities. High Court Jana Wibawa Trial: A KCJ Engineering finance manager told the High Court she was ordered to prepare four RM200,000 cheques (total RM800,000) as Bersatu “donations” linked to a Jana Wibawa project. Urban Mobility Upgrade: DBKL launched the LaLaport Transportation Hub in KL, aiming to move up to 10,000 passengers a day by linking rail, buses, taxis and e-hailing at the Hang Tuah interchange. Data Centre Rules: The government says it will only approve data centre projects after checking energy and water capacity, prioritising residents’ water needs and approving only when there is excess supply. Cooking Oil Subsidy Overhaul Push: PAC wants a reset of cooking oil subsidy management after finding weak targeting and supply-chain issues meant RM10.879b (2019–Feb 2025) didn’t fully reach intended recipients. Penang Tourism Goes AI: Penang urges hotels, restaurants and SMEs to adopt AI for digital marketing and tourist services as global travel patterns shift. Energy Transition: PETRA unveiled LSS6 plans for 2.5GW solar plus 1.25GW BESS, with tenders split into three lots including Bumiputera-focused participation. Cross-Border Retail Impact: A study says Singapore consumers could spend an extra S$1.05b annually in Johor after the RTS Link opens in 2027, while Johor spending in Singapore rises by S$756m.

Food Security & Agriculture: PM Anwar orders urgent measures to mitigate the Super El Niño impact on Malaysia’s food supply from November, with KPKM told to finalise plans without compromising food safety and to keep close engagement with farmers and fisheries. Halal Compliance: Kelantan will intensify monitoring of food premises after viral halal concerns, with preliminary investigations and reminders to operators to maintain shariah compliance. Energy Security: Malaysia will study the need for a national petroleum reserve stock to strengthen resilience amid global supply risks, alongside progress on renewables and biofuel initiatives. Communications Regulation: Dewan Rakyat passes the MCMC (Amendment) Bill 2026 to keep the regulator sustainable, including changes to governance and procurement contract limits. Statistics Leadership: Siti Asiah Ahmad is appointed Malaysia’s chief statistician, taking over from Mohd Uzir Mahidin upon retirement. Infrastructure & Water: Penang says updates on the Perak–Penang Water Project agreement are due soon, while Penang also signals no change to the RM852m Air Itam expressway contract value despite design revisions. SME Talent Pressure: Samenta urges review of new Employment Pass rules, warning higher expatriate salary thresholds could price SMEs out of specialised tech talent. Transport Tech: PLUS expands open toll payment via JustGO with ANPR to six more southern toll plazas. Industry Outlook: HLIB lifts Malaysia’s 2026 GDP growth forecast to 4.7% on stronger E&E exports and semiconductor demand, though it expects moderation in 2H26.

E&E & Semiconductors Boost: Hong Leong Investment Bank lifted Malaysia’s 2026 GDP growth forecast to 4.7% from 4.5%, citing stronger E&E exports and resilient global semiconductor demand tied to AI, data centres and advanced computing. High Court on Contracts: In Muhyiddin’s trial, the High Court heard PMO did not interfere with RM62m Jana Wibawa payments to KCJ Engineering, with testimony focusing on progress-based payments and an RM10m advance. Highway Payments Go Open: PLUS expanded JustGO open toll payments to six more southern toll plazas using ANPR, letting registered users enter/exit via any lane. Food Industry Expansion (Sarawak): Sarawak will build a RM70m integrated pineapple processing factory in Tukau, aiming to start operations by year-end and support contract farming for smallholders. Digital Connectivity (Sarawak): Demanlink plans wider 5G rollout across Sarawak after completing BCCK’s first live in-building coverage, partnering with U Mobile and EdgePoint. STI Talent Pipeline: MOSTI’s Malaysia Techlympics 2026 runs July–September with 90 competitions and 182 STI modules, targeting 1.8m youth nationwide. Subsidy Pressure in Sabah: Sabah expects revisions to the BUDI diesel scheme after state-federal engagement, citing fuel-use realities and impacts on farmers and vehicles. Sukuk Market: S&P says Malaysia led global sukuk growth in 1H2026 as local-currency issuance offset weaker GCC volumes. Climate Law Move: Malaysia’s National Climate Change Bill is set for Parliament this year, with carbon tax planned as an incentive for greener industry practices.

Food & Beverage Trade Push: Food & Drinks Malaysia by SIAL (FDM2026) runs July 21-23, aiming to position Malaysia as ASEAN’s food and beverage hub with a “one pass, two shows” setup including Chocolate Show 2026. Construction & Property Deal: Epicon will acquire a 60% stake in Rantau Urusan and LPB Construction for RM543.16m, funded via new shares and RCPS A, plus a private placement. Judicial Appointments: Seventeen people were appointed High Court Judicial Commissioners, including an AGC former deputy head of research, signalling a fresh bench for Malaysia’s courts. Border Logistics & Ports: PM Anwar told Parliament the Transport Ministry will discuss Malaysia–Thailand border ports and Penang’s role to improve logistics and infrastructure links. Energy & Shipping Risk: With Strait of Hormuz under strain, the Malacca Strait is seeing heavier traffic and renewed focus on maritime chokepoints, affecting regional trade planning. Palm Oil Watch: Malaysian palm olein futures rose again on rival edible oil strength and crude oil gains, while India’s June edible oil imports fell 29% as discounts narrowed. Sabah Funding Clarity: A RM1.5b interim special grant hike will not cut Sabah’s federal allocation ceiling, with development spending still prioritised. Insider Trading Ruling: Malaysia’s Court of Appeal upheld RM5.83m penalties in the WCT insider trading case, keeping the regulator’s win intact. Infrastructure Sustainability: JKR says 199 projects have undergone Green Rating Assessment, cutting carbon emissions equivalent by 44% and expanding green product scoring. Housing Planning: Government is moving to data-driven housing development using DOSM and NAPIC data to better match local needs and affordability. Batu Ferringhi Erosion Fix: A RM500,000 temporary coastal protection measure is underway, with a longer-term plan in the works. Singapore–Malaysia Cooperation: Leaders reaffirmed deeper ties on food security, energy, climate adaptation and start-ups during Tharman’s state visit.

Coastal & Transport Upgrades: Penang is deploying a RM500,000 temporary coastal erosion fix at Batu Ferringhi, using beach containers to cut wave impact until a long-term 12MP coastal protection plan is designed. In Johor, motorists welcomed Pasir Gudang Highway (FT17) upgrades, including LED street lights and road widening for safer night travel. Cross-Border Trade & Logistics: Anwar says the Malaysia–Thailand Border Economic Zone will ease Thai customs for Malaysian fisheries and agri goods, while transport discussions also cover border ports (including Sanglang and Perlis Inland Port) and rail links to boost logistics networks. Housing Policy: The government will set affordable home prices using local income and housing demand data under the National Housing Policy 2026–2035, using median household income mapping to better match affordability and supply. Healthcare Digitalisation: Malaysia’s Health Ministry will pilot AI to automate clinical documentation at selected hospitals before scaling up, aiming to reduce doctors’ paperwork while keeping patient care uninterrupted. Industry & Business Moves: Glyken Bio Products and Japan’s Ortho Group signed a RM4m+ research collaboration on bird’s nest extracts for therapeutic medicine; Dialog Group remains a “buy” for its Pengerang tank terminal resilience amid fuel storage demand; and United Asiapac Energy signed an underwriting deal for an ACE Market IPO. Aviation Sustainability: AirAsia’s sustainability chief Yap Mun Ching was named an ICAO Global Ambassador for 2026–2028.

Manufacturing Resilience & Costs: PM Anwar directed MITI and the Economy Ministry to engage manufacturers under global supply pressure, with plastics flagged as a key input for food packaging, E&E, automotive and medical devices. Food Security Law: Dewan Rakyat passed the Control of Padi and Rice (Amendment) Bill 2026, raising penalties up to RM250,000 for individuals and RM1m for companies to curb smuggling and market manipulation. Palm Biodiesel Demand: Malaysia’s National Biodiesel Programme is set to use about 1.13m tonnes of palm oil by end-2026, driven by B15 from June 2026 and ongoing depot upgrades for B20 blending. Digital Talent Pipeline: The Korea-ASEAN Digital Academy (KADA) launched to train about 200 industry-ready AI and digital professionals across 2026-2027. AI in Public Healthcare: MOH will pilot AI at selected hospitals to automate clinical documentation before scaling up. Agri & Industry Jobs: KTC will invest RM30m in a Gardenia bread plant in Sarawak, targeting 500 jobs. Energy & Industry Transition: Malaysia plans a National Climate Change Bill and a carbon tax framework to nudge greener industrial operations. Education Cost Savings: Ipoh’s SBK schools trial NEM 3.0 solar, cutting bills by about RM1,500–RM1,700 monthly. Workplace Safety Push: MSOSH urged KESUMA to review periodic workplace inspections after a Klang boiler fire death. Trade & Growth Outlook: Economy Minister said Malaysia is still confident of 4–5% growth in 2026 despite global headwinds, citing strong exports and manufacturing momentum.

Malaysia–Singapore Trade & Diplomacy: PM Anwar met Singapore President Tharman in Kuala Lumpur, with bilateral trade hitting RM402.35b in 2025 and up 14.5% to RM189.90b in Jan–May 2026, underscoring Singapore’s role as Malaysia’s top ASEAN trading partner. Workplace Safety Push: MSOSH urged KESUMA to reconsider periodic workplace inspections after a foreign worker died in a Klang boiler fire, warning that self-regulation alone isn’t enough. Education & Renewables: MOE is rolling out Net Energy Metering 3.0 solar for government-aided schools, with one Ipoh pilot expected to cut bills by RM1,500–RM1,700 monthly and enable schools to sell excess power to TNB. Semiconductor & Deep-Tech Finance: Economy and Finance deputies highlighted Arm access for 10,000 semiconductor professionals and proposed a one-stop semiconductor/deep-tech financing centre to help Malaysia move from manufacturing to innovation. Transport Infrastructure: Sultan of Selangor rode the newly opened LRT3 Shah Alam Line, calling for completion to original timelines while praising the project’s congestion relief. Palm Oil & Energy Links: Palm futures rose on stronger crude and Chicago soyoil, while MPOB data pointed to higher stocks and improving production. UN & Food Security in Parliament: Dewan Rakyat will debate UN reform, Malaysia’s food crisis contingency plans, and defence supply risks.

Energy Security Watch: DPM Fadillah says Malaysia’s fuel supply is stable as Petronas and PM Anwar engage talks amid Strait of Hormuz tensions, but global oil-and-gas price volatility could still strain the fiscal position. Offshore Gas Development: Seascape Energy plans to file its Temaris Cluster offshore Peninsular Malaysia development plan by year-end, targeting gas from the Tembakau field via two unmanned, solar-powered platforms tied to existing infrastructure, with start-up eyed for 2028. Heritage & Public Assets: JMM will get a RM23m repository centre at Lukut Museum grounds in Port Dickson to house 200,000+ archaeological collections, with construction starting next year and completion expected by 2031. Rural Infrastructure: KKDW allocates RM1.911m to upgrade roads and public facilities in Sungai Rambai (Melaka) under PAMS and JPD projects through 2026. Industry & Learning: UMK ramps up entrepreneurship for asnaf students, including a work-study Kafe Nusukopi funded by Maybank Islamic Berhad. Aviation Connectivity: Malaysia Airlines adds direct KL–Shenzhen and KL–Changsha services, expanding China network with up to seven weekly flights. Publishing Trade: Menassah Distribution signs an MoU with Perbadanan Kota Buku to list 3,000+ Emirati titles on Book Capital. Defence Contract Dispute: Malaysia-Norway row over Norway’s cancellation of NSM export approval for the Royal Malaysian Navy’s LCS continues to raise concerns about trust in defence procurement.

Energy & Industry Policy: Malaysia’s fisheries push gets a boost with plans for a comprehensive tuna port in Sepanggar (awaiting Sabah’s proposal), while the government also flags modernisation as key to food security and fishermen’s livelihoods amid rising fuel costs. Transport & Trade: Malaysia Airlines adds direct China links with new services to Shenzhen and Changsha, expanding connectivity for business and leisure travel. Regional Investment & Politics: Johor’s election win is seen as a continuity signal for investors, with the focus shifting from attracting deals to executing them for jobs and broader benefits. Sustainability & Skills: Entrepreneur Steven Sim urges firms to use AI as a capacity multiplier, not a cost-cutting substitute for talent. Infrastructure & Heritage: A RM23m repository centre will be built at Lukut Museum grounds in Port Dickson to store over 200,000 JMM archaeological collections, improving research access and preservation. Energy Storage: A 2MW/4.6MWh containerised BESS has been commissioned for a Malaysian shopping mall, supporting reliability and peak-demand management. Higher Education: Malaysia and Indonesia explore deeper higher-ed cooperation, including PhD capacity building and joint research.

AI for Business Skills: Entrepreneur and Cooperatives Development Minister Steven Sim urged Malaysian firms to use AI as a “capacity multiplier” while still investing in people, warning that cutting talent can widen skills gaps and raise long-term tech costs. Higher Education Links: Malaysia and Indonesia moved to deepen higher-education cooperation, including student mobility, joint supervision, dual degrees and research networks, as Indonesia pushes more PhD-qualified lecturers. Energy Storage for Retail: GSL Energy commissioned a 2MW/4.6MWh containerised battery energy storage system for a Malaysian shopping mall, designed to cut peak demand and improve reliability via a smart microgrid. EV Momentum: Research houses expect Malaysia’s EV penetration to hit about 8–10% by end-2026, supported by fuel subsidy rationalisation, more charging and a revised CBU EV policy. Food Enforcement: Police in Miri seized RM6.197m worth of frozen pork products stored without permits in a raid, with investigations under veterinary public health rules. Agri Trade Pressure: Penang sea bass farmers say stricter Thai inspections have halted exports, squeezing cash flow and pushing some to switch species. Halal Trade Push: Indonesia promoted D-8 halal economic cooperation through the D-8 Halal Expo 2026, targeting supply chains, logistics and technology exchange. Local Industry Support: Melaka will launch “Mula Melaka” in late August with RM1m to fund TVET alumni techno-entrepreneurs across skills and innovation clusters. Nature Conservation: Penang seeks EAAF recognition by designating the Penaga mudflats as a protected stopover for migratory birds. Cross-border Agriculture: Malaysia and Thailand pledged deeper agricultural cooperation plus tighter border management against scams, trafficking and wildlife/timber crimes.

TVET to Startup Push: Melaka will roll out the “Mula Melaka” programme in late August with RM1m to back TVET alumni as techno-entrepreneurs, funding equipment, marketing and licensing for businesses across seven skills-and-tech clusters. Data Centres & Jobs Debate: Malaysia’s data centre boom is expected to create high-skill roles and higher pay, but online critics question how many jobs will go to locals and whether the industry can meet AI talent and resource demands. AI for Industry Collaboration: Selangor’s SIBS@ASEAN visit to Bandung highlighted practical AI use in heritage conservation, education and religious services, including digital museum collection platforms. Aquaculture Trade Shock: Penang sea bass farmers say exports to Thailand have stalled after stricter Thai inspections, pushing some farms to switch species while cash flow dries up. Fuel Fleet Digitalisation: Setel’s Petronas SmartPay (cardless) is being positioned for East Malaysia as SKDS expands, aiming to improve fuel oversight for commercial fleets. Construction Safety: A Bangladeshi worker died in a Johor Bahru construction accident involving a boom crane while installing firefighting pipes. Express Bus Rules: New express bus regulations from June 15 refine service classification by seat-row layout and strengthen enforcement without fare hikes. Low-Carbon City Plan: Sarawak’s Sibu is set to pivot from timber reliance toward a low-carbon smart city model, backed by RM1.5b allocations to regional development agencies. Islamic FinTech Hub: Meezan Bank and Iqra University in Pakistan launched an IU Centre of Excellence in Islamic FinTech, focused on research, innovation and capacity-building. Data Centre Build Contract: Advancecon’s unit won a RM121.66m off-river storage ORS sub-contract for a Port Dickson data centre water supply scheme.