KUALA LUMPUR, JULY 30 — The hosting of the Formula One (F1) Bahrain Gulf Air Grand Prix (Bahrain GP) in Malaysia, as the host, has the potential to be a major economic catalyst by stimulating various sectors through higher spending by domestic and international visitors.
Professor Emeritus Dr Barjoyai Bardai from the University of Science and Technology Malaysia said the event could generate economic activity worth more than RM1 billion, supported by increased spending on the tourism, aviation, hospitality and other related sectors.
He said the event would increase hotel occupancy and demand for tourism-related services and food and beverage (F&B) activities, thereby creating more job and business opportunities.
“Every ringgit spent by visitors will generate wider economic benefits through increased income, employment and business opportunities.
“This race will also boost Malaysia’s global visibility through extensive international media coverage as well as providing an opportunity for Malaysia to highlight the country’s infrastructure, connectivity and business environment to potential investors,” he said.
Meanwhile, Director and Investment and Economic Strategy Analyst of IPPFA Sdn Bhd, Mohd Sedek Jantan also agreed, saying that the main delivery channel is through tourism exports.
He said that spending by foreign visitors is recorded as service exports in the national accounts, which directly supports Malaysia’s services Gross Domestic Product (GDP) as well as increasing tourism spending receipts in the current account.
He said, unlike domestic spending, this represented an influx of new demand into the economy, thus making the economic multiplier effect stronger.
“The second channel is private consumption, which contributes more than half to Malaysia’s GDP.
“Formula One visitors typically have higher per capita spending than the average leisure tourist, with spending focused on accommodation, flights, food and beverage, retail, entertainment and mobility services.
“This creates a widespread consumption stimulus that spills over the supply chain, supporting jobs and business income, especially in the tourism ecosystem,” he said.
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 quite modest.
“However, quarterly GDP, particularly in the fourth quarter of 2026, could record a modest increase through more vibrant service sector activity and higher tourism spending receipts,” said Barjoyai.
He said, more importantly, F1 helps diversify Malaysia’s economic growth by strengthening tourism and high-value services rather than relying solely on manufacturing and exports.
Therefore, the event is not expected to significantly change Malaysia’s overall annual GDP growth rate, but could support the growth of the services sector and strengthen consumer confidence.
The Bahrain GP F1 event in Malaysia is also expected to benefit certain sectors, especially aviation.
Barjoyai estimates that the event could generate approximately an additional 50,000 international visitors based on the base scenario.
Based on the assumption that 90 percent of the visitors arrive by air, the event could contribute around 45,000 domestic passenger movements and 45,000 international passenger movements, bringing the total additional passenger movements to approximately 90,000.
“Increased international arrivals can help increase airline load factors, especially on regional routes from Singapore, Thailand, Indonesia, China, Japan, Australia and the Middle East,” he said.
He said higher passenger traffic could also provide spillover benefits to retail and ancillary services at the airport.
Overall, tourism and retail are expected to benefit the most, supported by higher visitor arrivals and spending, with the broader economic impact likely to become more pronounced as the event approaches.
— BERNAMA
