Prime Minister Datuk Seri Anwar Ibrahim
PETALING JAYA: The Madani Government’s fourth national budget for 2026 allocates a total expenditure of RM419.2bil, comprising of RM338.2bil in operating expenditure (OE) and RM81bil in development expenditure (DE).
This compares with revised estimates for 2025, where the government is expected to spend RM412.1bil — with RM332.1bil for OE and RM80bil for DE- RM80bil – or RM8.9bil less than what was originally budgeted under Budget 2025.
When additional investments from the public sector are included — namely RM30bil from government-linked investment companies (GLICs), RM10bil in public-private investments, and RM10.8bil from federal statutory bodies and MoF Inc companies — total public expenditure under Budget 2026 is expected to rise to RM470 bil, compared with RM452bil in 2024.
Meanwhile, federal revenue is projected to increase to RM343.1bil in 2026, compared with the revised estimate of RM334.1bil for 2025.
During his Budget speech at the parliament today, Prime Minister Datuk Seri Anwar Ibrahim said the government remains committed to the Public Finance and Fiscal Responsibility Act 2023 [Act 850] while maintaining a pro-growth fiscal stance to support economic resilience.
“We reject the culture of uncontrolled borrowing, fight against leakages and corruption, and denounce the luxury of elite groups financed by the people’s hardship,” he said.
“Instead, we choose a difficult but necessary path — one of reform, fiscal discipline and institutional strengthening — because only this will safeguard Malaysia’s long-term stability.”
He described the fourth Madani Budget as a reflection of “national rejuvenation” and comprehensive reform.
For 2026, Anwar said the Malaysian economy is projected to grow between 4.0% and 4.5%, weighed down by persistent global uncertainties and ongoing geopolitical and geo-economic tensions.
Under the Madani administration, he said fiscal consolidation continues steadily — with the deficit narrowing from 5.5% of gross domestic product (GDP) in 2022, 5% in 2023, and 4.1% in 2024, towards 3.8% in 2025.
“God willing, in 2026 the deficit will fall further to 3.5%, and with continued discipline, we can achieve a 3% fiscal deficit in the medium term,” Anwar said.
He added that new borrowings have also trended lower — from RM100bil in 2022, RM92bil in 2023, RM77bil in 2024, and are expected to decline further this year.
