KUALA LUMPUR: The Finance Ministry does not see a need to recalibrate its Budget 2027 estimates in light of the Middle East conflict for now, says Liew Chin Tong (pic).
“The Finance Ministry remains open to receiving proposals and new ideas for Budget 2027. Based on developments in the first half of 2026, we do not see any need to revise our projections at this stage,” the Deputy Finance Minister told the Dewan Rakyat on Wednesday (July 16).
“However, we will study the situation by October. We will monitor the situation and the impact of the Middle East conflict,” he added.
Liew was responding to a supplementary question by Syahir Che Sulaiman (PN-Bachok) who had asked whether the rising subsidy bill would influence the Budget 2027 and whether the government can guarantee that the fiscal pressure will not lead to the implementation of new taxes and a reduction in assistance to the people. He also noted that Budget 2027 is likely to be an “election budget.”
Liew said the government footed RM800mil a month for the RON95 and diesel subsidies in January and February.
However, the amount shot up to RM5bil a month in March and April.
“The subsidy cost for May and June moderated to around RM4bil a month. Oil prices continue to moderate in July, and if the current market price remains, the government is projected to foot RM40bil in subsidies for petroleum products for 2026,” he added.
He said while rising oil prices have increased the cost of subsidies, they have also increased revenue from petroleum.
“Every US$1 per barrel change in the global crude oil price is estimated to have an impact of approximately RM300mil on the Federal Government's petroleum-related revenue. This does not include PETRONAS dividends,” he said.
He said the increased revenue would be able to cover a portion of the subsidy bill.
“The implementation of clear, comprehensive and well-coordinated immediate intervention measures has helped maintain the level of Federal Government expenditure without significantly affecting the country's fiscal position. If necessary, any revision to the 2026 fiscal projections will be announced during the tabling of Budget 2027, taking into account the latest economic indicators and the performance of revenue collection and expenditure up to the first half of 2026,” he said.
Budget 2027 will be tabled on Oct 9.
