Analyst: Iran conflict expected to put pressure on Malaysia's growth.

During the Iran conflict, temporary disruptions in energy supply may put pressure on Malaysia, prompting Affin Hwang Investment Bank to revise its GDP growth forecast for 2026 from 4.7% to 4.5%. Analysts in a report stated that despite Malaysia's recent approval for its ships to freely pass through the Hormuz Strait, the risk of crude oil supply cannot be entirely ruled out. They mentioned that growth is expected to be supported by strong exports of electronic products and continued consumption. With rising commodity costs and unfavorable weather conditions, it is anticipated that RON97 fuel, unsubsidized diesel, electricity, and food will face upward price pressures, leading to a revision of the CPI growth forecast for 2026 from 1.7% to 2.0%. They added that given the upward bias in inflation risks and slowing growth prospects, the Malaysian central bank may maintain its policy rate at 2.75% while assessing the impact of the conflict.