2025.10.0905:45:11UTC+00Malaysia to Roll Out 2026 Budget Targeting Fiscal Discipline and Growth

Malaysian Prime Minister and Finance Minister, Anwar Ibrahim, is set to present the 2026 budget today, with a focus on optimizing policy frameworks and aligning fiscal priorities with the Madani economic strategy outlined in July. This budget is anticipated to emphasize social protection measures and direct strategic investments towards the semiconductor, green energy, and AI-powered sectors. The GDP growth for the upcoming year is anticipated to be within the range of 4.5% to 5%, building upon the 4.0% to 4.8% growth expected in 2025. Analysts predict a reduction in the fiscal deficit to 3.4%–3.6% of GDP, down from 3.8% this year, supported by initiatives such as an expanded Sales and Services Tax and the rationalization of fuel subsidies. Although widespread tax increases are not foreseen, there may be an increase in excise duties on alcohol and tobacco, along with the introduction of a carbon pricing scheme targeting significant polluters. Other proposed measures might include incentives to boost private investment, advancements in digital healthcare, and a focus on affordable housing, alongside efforts to reintegrate into the FTSE World Government Bond Index.