The ringgit is expected to strengthen gradually to RM3.97 against the US dollar over the next 12 months, supported by resilient domestic economic growth, controlled inflation and sustained capital inflows, according to Hong Leong Bank Bhd (HLB).
The bank said the local currency’s outlook would also be supported by Budget 2027, which is expected to reinforce Malaysia’s economic growth momentum.
HLB forecasts Malaysia’s economy to expand by 5% next year, saying Budget 2027 provides a strategic roadmap to accelerate high-value economic growth while maintaining fiscal discipline and improving public well-being.
“With gross domestic product (GDP) growth projected at 5%, HLB maintains a positive outlook on Malaysia’s economic trajectory. The government’s GDP growth forecast of between 4.2% and 5.2% for 2027 is realistic and achievable,” the bank said in a statement.
For businesses, HLB said the emphasis on productivity, workforce development and targeted support would create opportunities to strengthen operational resilience, improve capabilities and pursue higher-value growth.
The outlook was discussed at the bank’s small and medium-sized enterprise (SME) customer forum, Business Matters with HLB: Budget 2027 Unpacked, which brought together government representatives, industry players and tax experts to examine the budget’s implications for businesses and Malaysia’s economic prospects.
Meanwhile, HLB managing director of business and corporate banking Yow Kuan Tuck said the government remained focused on helping local businesses improve their capabilities, productivity and long-term resilience.
He said global supply chain changes, rising operating costs and shifting workforce dynamics meant businesses needed to do more than simply adjust to cost pressures, including minimum wage increases.
Instead, businesses should strengthen their operations to increase the value added to their output.
“To support this journey, HLB remains committed to working alongside our customers by providing the capital and advisory services needed to build long-term competitiveness,” he said.
HLB added that targeted financing guarantees, tax measures and support for artificial intelligence (AI) and automation adoption could help businesses, particularly SMEs, improve productivity and access new markets.
The bank said the government’s prudent yet growth-supportive fiscal approach was also intended to expand economic potential, improve living standards and strengthen governance.
