Budget 2027
A HANDFUL of economic data is due this week, but all eyes will be on Friday’s Budget 2027 announcement.
The Statistics Department is expected to release the industrial production index (IPI), retail sales and unemployment rate.
According to Bloomberg estimates, Malaysia’s IPI is expected to grow 5.1% year-on-year (y-o-y) in August, accelerating from 4.7% in July.
Trading Economics expects Malaysia’s industrial production and retail sales to grow 2.8% and 7.3%, respectively, by the end of the quarter, based on its global macro models and analysts’ expectations.
UOB Global Economics and Markets Research expects a mildly more supportive fiscal stance under Budget 2027, with total expenditure projected at RM445.9bil, or 19.6% of gross domestic product (GDP), supported by resilient oil-related revenue and stronger tax collections.
Despite higher spending, UOB Research expects the fiscal deficit to narrow modestly to 3.3% of GDP in 2027 from an estimated 3.5% in 2026, reflecting continued fiscal consolidation alongside growth support.
Potential Budget 2027 measures include higher cash assistance, targeted subsidy enhancements and selective tax relief, as well as support for small and medium enterprises, gig workers and civil servants.
The brokerage also expects incentives for artificial intelligence, digitalisation, energy transition and strategic investments.
Supported by a more expansionary Budget 2027 and sustained artificial intelligence- and technology-driven investment, Malaysia’s growth is expected to remain resilient, with GDP growth likely targeted at 4.5%-5.5% (UOB Research: 4.6%).
Inflation data
THAILAND, the Philippines and Taiwan are expected to release their consumer price index (CPI) data this week.
According to Bloomberg estimates, Thailand’s headline CPI is expected to rise 0.49% month-on-month and 3% y-o-y in September, compared with 0.56% and 2.53%, respectively, in August.
Core inflation is expected to accelerate to 1.59% from 1.44%.
In the Philippines, headline CPI is forecast to rise 0.7% month-on-month and 6.7% y-o-y, against 0.6% and 6.1%, respectively, in August.
UOB Research expects Philippine inflation at 7.1% y-o-y.
Meanwhile, ING expects fuel and El Nino-related food price pressures to push Philippine inflation to 6.8% y-o-y in September from 6.1% in August.
In Taiwan, headline CPI is expected to accelerate to 2.4% y-o-y from 2.04% in August, while core inflation is forecast at 2.7%, up from 2.3%.
