Development spending to proceed as planned despite oil price uncertainty

PUTRAJAYA: The planned national development expenditure for the upcoming year will continue as scheduled, despite concerns over fluctuations in global oil prices, according to Economy Minister Akmal Nasrullah Mohd Nasir. While managing oil prices is a critical short-term matter, Akmal emphasized that the country's long-term development commitments must remain uncompromised.

The Ministry officially confirmed to the Economy Ministry that this year's national development expenditure will proceed as planned at the current level, he stated during the Ministry's regular monthly meeting. Akmal explained that the most substantial impact of oil price volatility would be felt through government fuel subsidies.

The Finance Ministry is currently evaluating the situation to strike a balance between mitigating the impact of supply disruptions on the public and managing the fiscal burden on the government. This issue is receiving close scrutiny by the Finance Ministry to effectively address both concerns. Akmal noted that the uncertainty surrounding oil prices is significant due to the multitude of unpredictable factors that can influence movements.

He added that there is still potential to manage the burden of rising global oil prices on the public more efficiently. Previously, analysts had anticipated that Budget 2027 might face pressure if the price of crude oil rose to $120 per barrel, due to the increased expenditure on fuel subsidies, which could diminish fiscal space for development spending and other initiatives.