Development expenditure seen rising 3.8pct to RM83bil in 2027 -- CIMB Securities
KUALA LUMPUR: Development expenditure is projected to rise a modest 3.8 per cent year-on-year to RM83 billion under Malaysia’s 2027 Budget, CIMB Securities said.
KUALA LUMPUR: Malaysia's 2027 budget projects a 3.8% increase in development expenditure to RM83 billion, according to CIMB Securities. The government allocated RM80 billion for development in 2026, with an estimated RM9 billion reduction in fuel subsidies to RM32 billion in 2027 providing additional fiscal flexibility for projects.
Domestic project awards in the first nine months of 2026 totaled RM177 billion, accounting for 76% and 72% of job values awarded in 2024 and 2025, respectively. Public-funded projects, however, remained relatively stagnant at RM37 billion, or 57% and 63% of levels in 2024 and 2025. Analysts emphasize focusing on project awards and execution, as some allocations may be tied to ongoing jobs rather than new tenders, while also noting the impact of the 16th general election scheduled by February 2028.
The report anticipates most infrastructure spending will target small-to-mid-sized projects, particularly in East Malaysia (Sabah and Sarawak) and interior areas, with a strong emphasis on water infrastructure, flood mitigation, rural infrastructure, and grid investments. Potential major infrastructure tenders include the second phases of Rasau and Langat 2 water supply schemes, Civil Main Contract 3 of the Penang Mutiara Line LRT, Northern Perak Water Supply Scheme, and new road and utility projects in Sabah and Sarawak.
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