Fitch: Malaysia's 2027 Budget deficit target hinges on revenue, subsidies
KUALA LUMPUR: Malaysia’s plan to narrow its fiscal deficit to 3.3 per cent of gross domestic product (GDP) in 2027 faces pressure from elevated subsidy costs and social spending, Fitch Ratings said.
Malaysia aims to achieve a fiscal deficit of 3.3% of its GDP under the 2027 budget, according to Datuk Seri Tengku Zafrul Abdul Aziz, the Malaysian Investment Development Authority chairman and a senior political advisor to the Prime Minister. The country has demonstrated fiscal discipline over the past three years, with the deficit decreasing from 5.5% in 2022.
Tengku Zafrul believes that if global economic and geopolitical uncertainties, oil prices, and other assumptions remain as expected, Malaysia will achieve the target. The 2027 budget is described as responsible, balancing investment incentives with efforts to ensure economic growth benefits a wider segment of Malaysians and businesses.
Tengku Zafrul noted that the budget takes into account the interests of different stakeholders, while strengthening economic growth and supporting both lower-income groups and businesses. Planned capital expenditure by government-linked investment companies and government-linked companies could generate positive effects for the broader economy, as investments by Khazanah Nasional, the Employees Provident Fund, and other institutions, along with capital expenditure by Petronas, send positive signals to potential investors.
Written by urgent.news from Malay Mail's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
