{
  "id": 13274121,
  "title": "2027 Budget: \"Balance, discipline and pragmatic\" [WATCH]",
  "url": "https://urgent.news/2026/10/10/2027-budget-balance-discipline-and-pragmatic-watch",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-10T00:29:05.000Z",
  "source": {
    "name": "New Straits Times",
    "slug": "new-straits-times",
    "url": "https://www.nst.com.my/business/economy/2026/10/1552116/2027-budget-balance-discipline-and-pragmatic-watch"
  },
  "original_language": "en",
  "account": "The 2027 Budget in Malaysia has been described as a pragmatic balance between fiscal consolidation, economic growth, and supporting the cost-of-living for Malaysians, according to economists. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the government was aiming to maintain fiscal discipline while providing targeted assistance to households and businesses to alleviate financial pressures. This was achieved through increased cash transfers, tax cuts for the M40 income group, and support for small and medium enterprises (SMEs) with credit guarantees, stated Dr Rashid. Universiti Teknologi Mara senior lecturer Dr Mohamad Idham Md Razak also praised the budget's balance, highlighting its commitment to reducing the fiscal deficit and supporting economic growth. However, the real test of the budget's success, he said, would be whether public spending translates into higher household incomes, better jobs, and stronger productivity. The federal fiscal deficit is projected to narrow to RM77.5 billion (3.3% of GDP) in 2027 from RM78.5 billion (3.6% of GDP) in 2026, marking six consecutive years of deficit reduction. Total expenditure is projected to increase by 3.6% to RM459.8 billion, while development expenditure will rise by 2.5% to RM83 billion to support key sectors like infrastructure, education, healthcare, and affordable housing. Lee Heng Guie, executive director of Socio-Economic Research Centre, praised the government's commitment to fiscal discipline but warned that Malaysia needs to broaden its revenue base and rationalise operating expenditure to sustain fiscal consolidation and preserve resources for productive investments. The declining tax-to-GDP ratio, at 12.1% in 2020-2027 compared to 13.8% in 2010-2019, underscores the need for stronger revenue collection, including the reintroduction of the goods and services tax. Dr Idham emphasized that while narrowing the fiscal deficit and moderating new borrowing is progress, the government must sustain revenue growth, improve spending efficiency, and ensure new borrowing finances productive investments capable of generating long-term economic returns. He stressed the need to maintain a credible fiscal consolidation path without undermining essential social protection or development spending. To achieve long-term gains, Idham suggested strengthening Malaysia's competitiveness by raising productivity and investment quality, reforming the labour market, and improving public spending efficiency. He recommended accelerating automation, digitalisation, AI adoption, and research and development, particularly among SMEs, and better aligning the labour market and skills ecosystem with industry needs. Lee cautioned that despite projected economic growth of 4.2-5.2% in 2027, household spending remains constrained by rising living costs and elevated debt. The government must ensure that economic growth translates into broader improvements in purchasing power, as cash assistance and fuel subsidies have highlighted persistent financial pressures on households.",
  "summary": "KUALA LUMPUR: The 2027 Budget strikes a pragmatic balance between fiscal consolidation, economic growth and cost-of-living support, economists say.",
  "key_points": [
    "2027 Malaysian Budget balances fiscal consolidation, growth, and cost-of-living support",
    "Government aims for fiscal discipline while aiding households and SMEs",
    "Deficit projected to narrow to RM77.5 billion (3.3% of GDP) in 2027"
  ],
  "editors_take": "The 2027 Budget's balance between fiscal discipline and social support means Malaysia's government is prioritising sustainable economic growth and poverty alleviation while maintaining a credible fiscal consolidation path.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}