2027 Budget to balance targeted relief, fiscal reform and growth
KUALA LUMPUR: Malaysia heads into the budget cycle on a strong footing, with the economy expanding 6.0 per cent in the second quarter of the year to lift the first-half expansion to 5.7 per cent.
Malaysia enters the 2027 budget cycle in a strong position, with the economy expanding by 6.0% in the second quarter and 5.7% in the first half of the year. Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim is set to present the fifth Madani Budget, which is expected to focus on continuity rather than dramatic policy shifts.
The budget must balance household support with efforts to reduce the fiscal deficit, which is projected to be around 3.5% of GDP for the year. Industry observers predict targeted relief measures rather than broad-based giveaways, such as tightening subsidies and redirecting resources towards investment, productivity, and higher-value economic activities.
The government may also increase funding for development projects, with allocations for STR and Sara (cash transfers) set to reach RM15 billion in the budget. The minimum wage and relief for middle-income households, such as higher personal tax relief and greater deductions for childcare, education, healthcare, and insurance, are also expected to be key focus areas in the 2027 Budget.
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