GDP vs GDI in Malaysia: did the terms of trade add to national income in 2026?

Malaysia’s economy grew 6.0% in the second quarter of 2026. GDP measures how much is produced, not how much that output can buy. When the prices Malaysia gets for its exports rise faster than the prices it pays for imports, the same output buys more, and national accountants call that difference a trading gain.

What is the difference between GDP and GDI?

Real GDP counts the volume of goods and services produced, valued at fixed 2015 prices in Malaysia’s accounts. Real gross domestic income (GDI) asks a different question: how much can that output buy? The gap between the two is the trading gain or loss from a change in the terms of trade, the ratio of export prices to import prices.

A simple illustration, not data: suppose one shipment of chips used to pay for 100 barrels of crude oil. If chip prices rise 10% and oil prices do not move, the same shipment now pays for 110 barrels. GDP records the same shipment. GDI records the extra 10 barrels of purchasing power.

The Department of Statistics Malaysia (DOSM) publishes real GDP and real gross national income (GNI), but no GDI line and no trading-gain item. GNI differs from GDP for another reason: it adds income earned abroad by residents and subtracts income paid to non-residents. So this note estimates real GDI from DOSM’s own expenditure tables and keeps the official GNI figures alongside.

How fast did real income grow compared with GDP?

By the CapsWindow estimate, real GDI grew about 8.1% in Q2 2026, two points faster than real GDP.

Real GDI (CapsWindow estimate) versus real GDP, year on year, Q2 2026, from DOSM quarterly national accounts at 2015 prices

The method: export and import price deflators come from DOSM’s quarterly expenditure series at constant 2015 prices and current prices. The trading gain is nominal exports divided by the import deflator, minus real exports. Real GDI is real GDP plus that gain. Using the average of the export and import deflators instead gives 7.9% for Q2 2026. Official real GNI comes from the key macroeconomic data table in DOSM’s Q2 2026 GDP publication.

Visual guide

How fast did real income grow compared with GDP?

Real GDP, YoY

• Q1 20254.4%
• Q2 20254.6%
• Q3 20255.3%
• Q4 20256.2%
• Q1 20265.4%
• Q2 20266.0%

06.2

Quarter	Real GDP, YoY	Trading gain, RM bn at 2015 prices (CapsWindow calculation)	Real GDI, YoY (CapsWindow estimate)	Real GNI, YoY (DOSM)
Q1 2025	4.4%	7.5	5.3%	4.2%
Q2 2025	4.6%	7.1	5.8%	4.8%
Q3 2025	5.3%	8.0	7.2%	4.5%
Q4 2025	6.2%	11.8	6.9%	4.8%
Q1 2026	5.4%	13.0	6.6%	3.6%
Q2 2026	6.0%	16.2	8.1%	2.2%

Estimated GDI grew faster than GDP in each of the six quarters. In Q2 2026 the export deflator was 7.3% higher than a year earlier and the import deflator 4.9% higher (CapsWindow calculation), and the gain reached about 3.6% of real GDP.

How large is the terms-of-trade gain, and where does it show up?

DOSM’s monthly terms-of-trade index (2010=100) also covers Q3, which the national accounts do not yet detail. In September 2026 it stood at 126.8, 2.2% higher than a year earlier, as export unit values rose 8.1% and import unit values 5.8% (DOSM, External Trade Indices, September 2026). In August the index was up 3.6% on the year (DOSM, August 2026).

Quarter	Terms-of-trade index, quarterly average (2010=100)	YoY
Q4 2025	123.6	+5.3%
Q1 2026	124.6	+5.0%
Q2 2026	122.0	+1.9%
Q3 2026	126.8	+3.4%

Quarterly averages and changes are CapsWindow calculations from DOSM’s monthly index table; September 2026 is provisional. The dip in Q2 came from April, when the index fell to 119.6 from 124.4 in March as the import unit value for mineral fuels jumped from 121.7 to 186.0. That was shortly after the Middle East conflict escalated at the end of February and pushed oil prices up.

Malaysia is both an oil and gas exporter and an electronics exporter, so it helps to split the index by product group.

SITC section	Export unit value, Sep 2025 to Sep 2026	Import unit value, Sep 2025 to Sep 2026	Net exports, Jan to Sep 2026
Mineral fuels (section 3)	+27.0%	+45.9%	+RM4.8 billion
Machinery and transport equipment, including E&E (section 7)	+3.6%	−1.4%	+RM111.0 billion

All four figures are CapsWindow calculations from DOSM’s unit value index tables and monthly trade data. Fuel import prices rose faster than fuel export prices, so oil on its own worked against Malaysia’s terms of trade, but fuel trade is close to balanced (RM161.7 billion of exports against RM157.0 billion of imports in January to September 2026). In machinery and transport equipment, export prices rose while import prices slipped, on a trade base more than five times larger. This is arithmetic on price indices; it does not prove which product caused the gain.

Is Malaysia on the same side as Korea?

Yes, both gained, but Malaysia far less. Korea’s real GDI rose 18.8% in Q3 2026 against real GDP growth of 3.4%, the fastest GDI growth since Q4 1977, and Korea’s trading account swung from a loss of 10.9 trillion won in Q3 2025 to a gain of 77.5 trillion won (Bank of Korea ECOS, table 200Y106).

	Korea	Malaysia
Latest quarter	Q3 2026	Q2 2026
Real GDP, YoY	3.4%	6.0%
Real GDI, YoY	18.8% (official)	8.1% (CapsWindow estimate)
GDI minus GDP	15.4 points	about 2 points

The quarters and methods differ, so treat the comparison as a matter of scale. Malaysia’s GDP grew much faster than Korea’s, but its terms-of-trade gain was a fraction of Korea’s. One visible difference in the data above is that Malaysia’s machinery and electronics export prices rose only 3.6% in the year to September, and its oil and gas exports roughly offset its fuel imports.

Why does the gain not feel like extra income?

Three things in the data point that way.

First, more of the income produced in Malaysia went abroad. Net primary income from abroad was minus RM27.2 billion in Q2 2026, against minus RM9.5 billion in Q2 2025, so real GNI grew only 2.2% while real GDP grew 6.0% (DOSM Q2 2026 publication). This line covers profits and dividends of foreign-owned firms, interest and cross-border wages; DOSM’s release does not say which part grew.

Second, household spending grew more slowly than output. Private consumption rose 4.8% in Q2 2026 against GDP growth of 6.0% (DOSM, Q2 2026). Bank Negara’s September statement noted “limited spillover of external sector strength to wages” (BNM, 3 September 2026).

Third, part of the energy-price gain reaches the government rather than households. The Finance Ministry estimates Petronas’s dividend at RM27 billion for 2026 and RM32 billion for 2027 (Bernama, 9 October 2026).

DOSM does not state how it deflates GNI. A CapsWindow check found that nominal GNI divided by the GDP deflator lands close to the published real GNI (423.6 against 424.7 billion ringgit in Q2 2026), so the official real GNI should not be read as a measure that already includes the terms-of-trade gain.

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