Malaysia’s public sector financial position remains sound, well-managed, says MOF

Malaysia's public sector financial position remains robust and well-managed, according to the Ministry of Finance (MoF). The MoF's Fiscal Outlook and Federal Government Revenue Estimates 2027 report revealed that the country's consolidated public sector (CPS) performance is propelled by public finance reforms and disciplined fiscal management.

The report highlighted the implementation of the Public Finance and Fiscal Responsibility Act 2023 (Act 850) and the proposed legislation on government-owned entities as key drivers of this success. The MoF emphasized that the federal government is committed to improving fiscal transparency and strengthening governance and oversight across public sector entities.

Each tier of government is expected to contribute to national development through strategic investments in critical infrastructure and social programmes to ensure the well-being of the rakyat. The CPS consists of both general government and non-financial public corporations (NFPCs). The CPS as a whole is forecasted to have a deficit of RM162.09 billion, or 7.0% of GDP, in 2027.

Revenue is projected to grow by 7.3% to RM402.67 billion, while operating expenditure is expected to increase by 3.6% to RM434.32 billion. The current balance for NFPCs is anticipated to show a surplus of RM60.93 billion, while the public sector current balance is forecasted to record a surplus of RM29.28 billion. At the general government level, the MoF projected an overall deficit of RM75.29 billion, or 3.2% of GDP, for 2027.

State governments are estimated to have a consolidated overall surplus of RM2.39 billion, or 0.1% of GDP, in 2026. NFPCs are projected to have an overall deficit of RM57.15 billion, or 2.6% of GDP, in 2026.