RHB Investment Bank projects 2027 Malaysian budget at RM437.8 billion with modest expansion

RHB Investment Bank Bhd forecasts that Malaysia’s 2027 federal budget will allocate RM437.8 billion, with development expenditure climbing to RM83 billion, up from RM81 billion in 2026. The bank expects the budget to remain modestly expansionary while continuing fiscal consolidation, keeping the deficit near 3.5% of GDP. The announced theme “Reaching for the Skies, While Anchored on Our Values” will guide five pillars: fiscal sustainability, inclusive growth and infrastructure, social protection, business-investment climate, and energy, food security and climate resilience.

Priorities include advanced manufacturing, energy transition, aerospace, chemicals, and continued implementation of the New Industrial Master Plan 2030, National Energy Transition Roadmap and National Semiconductor Strategy. Revenue is projected to come from tighter tax administration, refinements to the Sales and Service Tax framework and selective excise duties rather than new taxes. GDP growth is projected at 4.9% in 2027, with headline inflation at 1.9%, while external risks such as U.S. tariff policy and AI investment cycles remain.