Emoluments, pensions drive higher govt operating spending
KUALA LUMPUR: Higher emoluments, retirement charges and debt servicing are driving government operating expenditure 3.8 per cent higher to RM376.8 billion in 2027.
Malaysia's government spending is set to rise 3.8 percent in 2027, driven by higher emoluments, retirement costs, and debt servicing, according to Kenanga Research. Emoluments, the largest portion of operating expenditure, are expected to grow 2.9 percent to RM111.6 billion next year from RM108.4 billion in 2026, representing 29.6 percent of total spending.
The increase is attributed to salary hikes, added healthcare and education staff, and preparations for the Year One cohort intake. Retirement charges are forecast to climb 4.2 percent to RM44.6 billion as the pensioner population expands. Debt servicing costs are projected to rise 6.5 percent to RM61 billion, making up 16.2 percent of expenditures.
Despite lower forecasts for subsidies and social assistance, these will still account for 19.3 percent of the budget due to ongoing subsidy rationalization efforts.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
