Malaysia plans to cut fiscal deficit to 3% by 2028 under Budget 2027

Treasury secretary-general Johan Mahmood Merican told a 90-minute briefing that the government is committed to reducing the fiscal deficit to 3% of GDP by 2028, after reaching 3.3% in 2027. He said growth may moderate slightly next year due to global uncertainties, with inflation likely to edge up while unemployment remains low. The fiscal plan includes a deficit of 3.6% for one outlet year, decreasing to 3.3% in 2027 and 3% in 2028, and a debt-to-GDP ratio dropping from 65.2% in 2025 to 63.7% in 2027.

Budget 2027 proposes RM459.8 billion in federal expenditure and RM50.2 billion in additional investments from GLICs, public-private partnerships, statutory bodies and the Ministry of Finance Inc., totaling RM510 billion. Fuel subsidies are expected to stay around RM40 billion, and the government will fund operating costs from revenue while borrowing for development projects. Merican also highlighted the need for competition and simplified import processes to pass on benefits of a stronger ringgit to consumers.