PETALING JAYA: Government spending on subsidies and assistance exceeded RM80bil, including fuel subsidies of about RM40bil and welfare assistance amounting to nearly RM3.3bil, says Prime Minister Datuk Seri Anwar Ibrahim.
He said the crisis in the Middle East had pushed fuel subsidy costs to RM40bil.
“As a result, the fiscal deficit for 2026 is now projected at 3.6% of GDP, compared with the original target of 3.5%,” he said when tabling Budget 2027 on Friday (Oct 9).
“Nevertheless, the deficit remains on a declining path, down from 5.5% in 2022 and 3.7% last year.”
Anwar said the Government expects the fiscal deficit to fall further to 3.3% in 2027, putting it on track towards its target of 3.0% by 2028.
“The reduction in the fiscal deficit and controlled levels of new borrowing have enabled the Federal Government debt-to-GDP ratio to decline steadily from 65.2% in 2025 to 64.0% in 2026, and it is expected to ease further to 63.7% in 2027,” he said.
