Malaysia’s F1 Return Could Fuel Over RM1 Billion Economic Activity
KUALA LUMPUR, July 30 (Bernama) -- Malaysia's hosting of the Formula 1 Gulf Air Bahrain Grand Prix 2026 (Bahrain GP) could serve as a major economic catalyst by stimulating multiple sectors through higher expenditure by domestic and international visitors.
Professor Emeritus Dr Barjoyai Bardai of the Malaysia University of Science and Technology said the event could fuel over RM1 billion in economic activity, supported by increased spending on tourism, aviation, hospitality and related sectors.
He said the event would boost hotel occupancy and demand for travel-related services and food and beverage (F&B) activities, creating more employment and business opportunities.
“Every ringgit spent by visitors would generate wider economic benefits through increased income, employment and business opportunities.
“The race would also enhance Malaysia's global visibility through extensive international media coverage while providing an opportunity to showcase the country's infrastructure, connectivity and business environment to potential investors,” he said.
Echoing the view, IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said the primary transmission channel is through tourism exports.
He noted that spending by foreign visitors is recorded as an export of services in the national accounts, directly supporting Malaysia's services gross domestic product (GDP) while improving travel receipts under the current account.
Sedek said, unlike domestic spending, this represents new external demand entering the economy, making the economic multiplier considerably stronger.
“A second channel is private consumption, which accounts for more than half of Malaysia's GDP. Formula One visitors typically have significantly higher per capita expenditure than average leisure tourists, with spending concentrated in accommodation, aviation, food and beverage, retail, entertainment and mobility services.
“This creates a broad-based consumption impulse that cascades through supply chains, supporting employment and business revenues, particularly within the tourism ecosystem,” he explained.
On the potential impact of the Bahrain GP on Malaysia’s GDP growth this year, Barjoyai said the direct contribution to annual GDP would be relatively modest.
“Yet, quarterly GDP, particularly in the fourth quarter of 2026, could receive a modest uplift through stronger services-sector activity and higher tourism receipts,” Barjoyai said.
More importantly, he noted that Formula 1 helps diversify Malaysia’s economic growth by strengthening high-value tourism and services rather than relying solely on manufacturing and exports.
Therefore, the event is unlikely to materially change Malaysia’s overall annual GDP growth rate on its own, but it can meaningfully support growth in the services sector and reinforce consumer confidence.
The event is also expected to benefit specific sectors, particularly aviation. Barjoyai estimated it could generate about 50,000 additional international visitors under the base-case scenario.
Assuming 90 per cent of these visitors arrive by air, the event could contribute around 45,000 inbound and 45,000 outbound passenger movements, bringing the total additional passenger movements to approximately 90,000.
“The increase in international arrivals could help raise airline load factors, particularly on regional routes from Singapore, Thailand, Indonesia, China, Japan, Australia and the Middle East,” he said.
He added that the higher passenger traffic could also provide spillover benefits to airport retail and ancillary services.
Overall, tourism and retail are expected to benefit the most, supported by higher visitor arrivals and spending, with the wider economic impact likely to become more pronounced as the event approaches.
-- BERNAMA
