PUTRAJAYA: Focus will continue to be given on prudent fiscal management in Budget 2027 to return benefits to the people and reduce cost-of-living pressures, says the Prime Minister.
Datuk Seri Anwar Ibrahim said savings from improved governance and efforts to curb leakages will be redirected to the people.
He said although Malaysia’s inflation rate is one of the lowest in the world at around 2%, the public still feels cost-of-living pressures due to rising prices of goods and certain services.
“When people ask why this could not be done two years ago, we had to resolve several issues first. We had to address debt, be prudent and set priorities,” he said.
The Prime Minister said the government must balance the need to reduce debt and curb spending with the requirement to increase allocations for critical sectors such as defence, housing for service members and police, and school facilities.
This approach is important to ensure every ringgit the government spends delivers greater economic and social value for the people, he added.
Anwar said the government’s fiscal space has improved through a more disciplined financial management but these savings must be safeguarded from erosion by leakages and waste.
He said a stronger fiscal position enables the government to provide assistance such as sports shoes for schoolchildren, as well as allowances and minimum income support for rubber smallholders and padi farmers.
“This can all be achieved if we manage finances well and ensure that government expenditure truly reaches the targeted groups.”
Anwar said solid economic growth must also translate into quality job opportunities, higher wages and reduced income inequality, and should not be measured solely by the gross domestic product growth rate.
The Prime Minister also explained that external factors and global markets influence the price of goods, citing the cost of imported phosphate fertiliser via the Strait of Hormuz following the crisis in the Middle East.
He said fluctuations in commodity prices, logistics costs and disruptions in international supply chains can directly impact domestic prices, limiting the government’s ability to control all prices.
The government, Anwar said, will provide assistance and facilities based on the country’s financial capacity, with a more targeted approach to ensure public resources are not wasted.
He cited the decision to maintain subsidised RON95 petrol at RM1.99 per litre, even as global oil prices rise, as a measure to protect household disposable income.
The decision, he said, reflects the government’s need to balance fiscal pressures from subsidies with the need to maintain stable transportation costs and the public’s purchasing power.
“Ultimately, in managing the national economy, the income and livelihoods of ordinary people become the measuring standards,” he said.
