KUALA LUMPUR: Malaysia’s 6% economic growth does not automatically translate into significantly more government revenue or spending, particularly as growth in sectors such as artificial intelligence (AI), data centres and the digital economy does not directly generate government revenue, says Datuk Seri Anwar Ibrahim.
The Prime Minister said there was a misconception that stronger economic growth should automatically result in higher government revenue and, consequently, greater government 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 not how the economy works,” he said in his speech at the National Innovation and Commercialisation Expo 2026, held at the Kuala Lumpur Convention Centre here yesterday.
Malaysia’s economy expanded 6% in the second quarter of 2026, up from 5.4% in the first quarter, with growth for the first half of the year reaching 5.7%.
Anwar, who is also Finance Minister, said growth in newer sectors had a different impact on the economy compared with more traditional activities.
“High growth in AI, data centres and the digital economy 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 said the service differed from sectors such as manufacturing and agriculture, where returns to the country were more direct.
He said the government therefore had to remain prudent with spending despite the strong headline growth, particularly as ministries, agencies, states and local authorities 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 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%.
