RHB IB: Budget 2026 seen boosting consumer sector


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KUALA LUMPUR: Budget 2026 is expected to be supportive of the consumer sector, with savings from fiscal reform measures such as the Sales and Services Tax (SST) expansion and RON95 petrol subsidy rationalisation likely to be rechannelled into additional fiscal support, RHB Investment Bank Bhd (RHB IB) said.

In a note today, the bank said allocations for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) could be raised, giving more assistance to lower-income groups struggling with the high cost of living.

"The higher consumer disposable income should benefit consumer staples-related companies,” it said.

RHB IB also expects civil servants to receive the second phase of salary adjustments of 3-7 per cent from January 2026, after the first round of increments of 4-8 per cent took effect in December 2024.

"We expect bonuses for civil servants and income tax relief measures to be proposed - effective tools to lift disposable income and bolster consumption.

"Additionally, excise duties on sugar-sweetened drinks, tobacco and alcohol may rise after Prime Minister Datuk Seri Anwar Ibrahim signalled the government’s intention to curb Malaysia’s growing burden of non-communicable diseases,” it said.

The Ministry of Finance has scheduled the tabling of Budget 2026 in parliament for Oct 10, 2025.

RHB IB said it is also looking for clarity on subsequent phases of RON95 subsidy retargeting - specifically whether and how subsidies will be withdrawn from high-income earners - to assess the potential inflationary impact.

On the sector outlook, it said consumer sentiment could bottom out with greater clarity on US tariff policies, the overnight policy rate cut, and the ringgit’s strengthening.

"Stimulus measures such as MyKasih credit, lower RON95 petrol prices and extra public holidays announced by Anwar Ibrahim in July should also buoy sentiment.

"Furthermore, easing commodity prices could reduce input costs for food manufacturers in the second half of this year, further supported by the stronger ringgit,” it added. - Bernama

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