Malaysia’s economy grew by 4.4% y/y in Q2 as strong investment was offset by weak exports. Looking ahead, growth is likely to slow in the near term as planned fiscal tightening and subdued global growth weigh on demand.
In Indonesia, President Prabowo used his first state address to pledge measures to combat corruption and expand his free school meal programme. But his 2026 budget plan – featuring a big increase in defence spending and ambitious revenue targets – looks optimistic and could lead to Indonesia breaching its fiscal rules.
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