In brief
A report commissioned by the Federation of Malaysian Manufacturers estimates that the 2026 haze event caused roughly 1,700 deaths and about $2 Billion in welfare losses in Malaysia. The majority of fatalities were attributed to transboundary smoke, and the haze disrupted business operations in 69 % of surveyed firms. The study used benefit‑transfer methods to monetize impacts and highlighted that fine particulate matter from fires can travel long distances, affecting populations far from the source.
On 29 October 2026, the Federation of Malaysian Manufacturers (FMM) released a report outlining the health and economic toll of the country’s 2026 haze episode. The analysis estimates that about 1,700 people died and that the event inflicted roughly 8 billion ringgit – approximately US$2 Billion – in welfare losses across Malaysia.
The death toll range cited by the report spans 1,300 to 2,300 individuals, reflecting uncertainty in attributing mortality to short‑term exposure to fine particulate matter (PM₂.₅). PM₂.₅ refers to airborne particles smaller than 2.5 micrometers that can penetrate deep into the lungs and enter the bloodstream, causing a spectrum of health problems from respiratory irritation to cardiovascular events.
Out of the estimated deaths, 1,600 are attributed to transboundary smoke – aerosol that migrated from fires occurring outside Malaysia’s borders. When the analysis assumes that fire smoke has a toxicity comparable to other fine particles, the death count drops to around 600, illustrating how assumptions about pollutant composition can shift epidemiological estimates.
To quantify the welfare impact, the study employed standard benefit‑transfer methods. This approach takes indirect cost estimates derived from one context – usually an adjacent or similar economy – and applies them to the population in question. Using this methodology, and incorporating the death estimate, the FMM quantified a welfare loss of 8 billion ringgit, with a potential lower bound of 3 billion ringgit and an upper bound of 15 billion ringgit.
Business activity was also severely affected. A survey of 86 FMM member sites, including 81 manufacturers, revealed that 69 % of firms experienced some operational impact due to the haze. Approximately one‑quarter reported moderate or significant disruption, primarily caused by staff absenteeism and supply‑chain interruptions. Two‑thirds of respondents reported already being affected in August and September of 2026, indicating that the haze had a prolonged operational footprint.
Methodological Considerations
Because the haze event overlapped with government data collection cycles, the FMM relied on existing surveillance systems for temperature, humidity, and air‑quality monitoring. The analysis integrated satellite‑derived aerosol optical depth measurements with ground‑based particulate‑matter sensors to triangulate exposure peaks. The time window for the mortality estimate was confined to July 1–October 22, 2026, matching the period of maximum aerosol loading reported by the Malaysian Environmental Protection Agency.
The uncertainty band in the death estimate arises from several sources. First, the attribution of mortality to fine particulate concentration relies on concentration‑response functions derived from epidemiological studies conducted in urban Asian settings. Second, the transboundary nature of the pollution requires transport and dispersion modelling that incorporates meteorological data across several countries. Third, different health‑impact assessment models – such as the WHO’s Global Exposure‑Mortality model versus the U.S. Environmental Protection Agency’s approach – can yield divergent mortality figures for the same exposure scenario.
Despite these uncertainties, the consensus across independent health‑impact models suggests that the 2026 haze episode constituted one of the most severe air‑quality events in Malaysia’s recent history. The combination of high particulate concentration, widespread reach, and significant time exposure is consistent with increases in respiratory and cardiovascular hospital admissions documented by state health departments during the period.
The economic loss estimate captures direct health costs, such as medical treatment and loss of productivity due to illness. It does not fully accommodate broader societal impacts like long‑term disability, diminished educational outcomes for children exposed to fine particles, or property damage from fire‑related hazards that often accompany haze episodes.
Future research recommendations put forth by the FMM include extending benefit‑transfer models to account for these indirect costs, enhancing real‑time surveillance of transboundary haze through improved satellite‑infrastructure, and developing policy interventions that reduce transboundary fire risk, such as tighter enforcement of land‑clearing regulations in neighboring countries.
In sum, the Federation of Malaysian Manufacturers’ report anchors the 2026 haze event within a quantifiable framework of public health loss and business disruption. The findings underscore the importance of cross‑border cooperation in air‑quality monitoring and the need for rapid response systems that can mitigate both the human and economic costs of future haze episodes.
