PETALING JAYA: The government has allocated a record RM510bil under Budget 2027.
“The Fifth Madani Budget continues an expansionary fiscal policy, mobilising the full strength of the nation, with total expenditure and investment amounting to RM510bil, compared with RM470bil previously,” Prime Minister Datuk Seri Anwar Ibrahim said when tabling the national spending plan in the Dewan Rakyat on Friday (Oct 9).
Anwar said RM376.8bil would be allocated for operating expenditure and RM83bil for development expenditure.
Another RM25bil will come from investments by government-linked investment companies (GLICs), RM11bil from public-private investments and RM14.2bil from investments by federal statutory bodies and companies under the Minister of Finance Incorporated (MOF Inc).
Anwar said federal revenue for 2026 was now projected to be higher than initially estimated, with the upward trend expected to continue next year.
“This year, federal revenue is projected to be higher at RM363.6bil, compared with the original estimate of RM343.1bil. Next year, revenue is expected to continue rising to RM380.8bil,” he said.
He said the Middle East crisis had also pushed the fuel subsidy bill to RM40bil.
As a result, the fiscal deficit for 2026 is now projected at 3.6% of gross domestic product (GDP), slightly higher than the original target of 3.5%.
“Nevertheless, the deficit remains on a downward trajectory, falling from 5.5% in 2022 to 3.7% last year,” he said.
Anwar said the government aimed to narrow the deficit further to 3.3% in 2027 and 3% by 2028.
“The reduction in the deficit, together with the controlled level of new borrowing, has enabled the federal government's debt-to-GDP ratio to decline steadily, from 65.2% in 2025 to 64% in 2026, and is expected to fall further to 63.7% in 2027,” he said.
