KUALA LUMPUR: Malaysia’s 6% economic growth does not automatically mean the government has significantly more money to spend, particularly as growth in sectors such as artificial intelligence (AI), data centres and the digital economy does not translate directly into government revenue, says Datuk Seri Anwar Ibrahim.
The Prime Minister said there was a misconception that stronger economic growth should correspond with higher government revenue and, consequently, greater spending.
“Many have asked, now that we have recorded 6% growth, shouldn’t revenue be higher and shouldn’t we be able to spend more?
“But that is not correct. That is how the economy works,” he said in his speech at the National Innovation and Commercialisation Expo (NICE) 2026 at the Kuala Lumpur Convention Centre here on Thursday (Aug 27).
Malaysia’s economy expanded by 6% in the second quarter of 2026, up from 5.4% in the first quarter.
Anwar said growth in newer sectors had a different impact on the economy compared with more traditional economic activities.
“High growth in AI, data centres and digital does not provide direct revenue to the country.
“What it provides is development, job opportunities and an increase in technological capabilities. That is where the returns are,” he said.
Anwar, who is also Finance Minister, said this differed from activities such as manufacturing and agriculture, where the returns to the country were more direct.
He said the government therefore had to remain prudent with its expenditure despite the strong headline growth figure, particularly as various ministries, agencies, states and localities continued to seek higher allocations ahead of the national Budget.
“There is a limit to additional allocations because we cannot take on high levels of debt. We cannot expect funds to fall from the sky.
“The funds come from taxes, and we are not in a position to increase taxes.
“Therefore, we have to be more careful with our spending,” he said.
Anwar said the government must instead maximise existing resources, including through greater collaboration among government agencies, universities, government-linked investment companies and the private sector.
The 6% second-quarter expansion was Malaysia’s strongest second-quarter growth outside the pandemic period since 2014, while growth for the first half of the year stood at 5.7%.
