PETALING JAYA: The Finance Ministry confirmed it issued guidelines to ministries and agencies to reprioritise their operating expenditures following the ongoing global supply challenges and rising subsidy obligations.
In a statement, the ministry said the measure is part of a prudent fiscal management approach to optimise government resources and ensure continued support for the rakyat.
"The Finance Ministry emphasised that these expenditure adjustments will be carried out without compromising critical public services or economic stability," it said on Wednesday (April 29).
The Treasury has reportedly ordered government ministries and agencies to cut their operating expenditures due to the impact of the Middle East conflict.
In a directive issued today (April 29), Finance Ministry secretary-general Datuk Johan Mahmood Merican said the National Budget Office was asked to review the remaining estimated expenditures under the 2026 budget.
He said all ministries, departments, and agencies were to review their remaining operational expenditures for the year in order to save costs.
The proposed cuts include salaries and allowances for unfilled vacancies, a 10% reduction on services, supplies and assets, as well as a 20% cut on budgets for federal statutory bodies and companies limited by guarantees.
All ministries, departments, and agencies have been given until May 15 to submit their proposed budget reviews to the National Budget Office.
“As you are aware, the geopolitical situation caused by the war in the Middle East has resulted in restrictions in the Strait of Hormuz, which triggered an acute spike in the price of crude oil.
“This external factor has increased logistical costs, which has a direct impact on the cost of living for Malaysians,” he said in the directive quoted in several media.
