SARAWAK’S economy is projected to expand by 5.0 per cent to 6.0 per cent in 2026, supported by resilient domestic demand and continued investment activity, amid an outlook shaped by softer external conditions and global uncertainty.
Deputy Premier and Second Minister of Finance and New Economy, Datuk Amar Douglas Uggah Embas, said the state’s growth momentum will continue to be underpinned by strong internal demand, even as external trade moderates due to commodity price movements and geopolitical headwinds.
“While trade performance softened in 2025, the moderation largely reflected lower commodity prices rather than a broad-based contraction in external demand. Total trade declined by 9.4 per cent to RM180.0 billion from RM198.6 billion in 2024.
“In the first quarter of 2026, trade activity remained subdued amid heightened global uncertainty, with exports and imports declining by 8.1 per cent and 9.2 per cent, respectively, compared with the corresponding period in 2025,” he said.
He said this in his winding-up speech at the Sarawak Legislative Assembly (DUN) sitting here today.
By commodity, Uggah said the liquefied natural gas (LNG) remained the largest export contributor in 2025, while crude palm oil (CPO) exports strengthened on improved supply conditions and sustained demand.
“However, crude petroleum exports continued to be weighed down by weaker global oil prices,” he added.
He also said that the investment activity remained positive, with Sarawak securing RM5.9 billion in approved manufacturing investments, particularly in higher value-added sectors such as chemicals and electrical and electronics, alongside continued downstream palm oil-related projects.
“Public development expenditure also continued to underpin economic activity, with close to RM17 billion invested by the Sarawak and Federal Governments for capital development in 2025. These investments are expected to accelerate infrastructure delivery, strengthen public service, and support Sarawak’s broader economic transformation agenda,” he said.
Uggah said that investment facilitation efforts and strategic initiatives will continue under the 13MP to further strengthen Sarawak’s competitiveness and investment appeal.
“To sustain development momentum, approximately RM15.3 billion in development expenditure has been approved for 2026 to advance key infrastructure projects and socio-economic programmes, particularly those aimed at improving connectivity, narrowing regional development gaps, and supporting long-term growth priorities,” he said.
On the consumption side, Uggah said public consumption is expected to expand by 20.1 per cent in 2025, supported by the implementation of the Public Service Remuneration System (SSPA), while private consumption is projected to grow gradually, underpinned by improving household incomes, EPF flexibility, and targeted fiscal measures including Sarawak Basic Needs Assistance (SKAS) and Sumbangan Tunai Rahmah (STR).
