Budget 2027 prioritises fiscal discipline and household cost relief

Malaysia will pursue tighter control of public finances under Budget 2027 while maintaining support to ease household expenses, particularly for lower-income groups, Prime Minister Datuk Seri Anwar Ibrahim said. Savings from better governance and reduced leakages would be channelled towards assistance.

Speaking in an RTM interview on Oct 10, Anwar, who is also Finance Minister, said stronger fiscal capacity must be protected against waste. The government needs to limit spending and reduce debt while providing more funding for defence, accommodation for police and service members, and school facilities, he said.

Anwar said inflation of around two per cent had not eliminated the pressure households face from higher goods and service prices. He cited the retention of subsidised RON95 petrol at RM1.99 per litre as a way to protect disposable income, despite oil rising to about US$110 per barrel from the US$70 per barrel assumption in initial government projections.

He said international commodity prices, freight expenses and supply disruptions constrain the government's ability to influence domestic prices. Measures available to ease those pressures include improving supply chains, widening access to farmers’ markets and increasing goods sales through the Federal Agricultural Marketing Authority.

Investment in information technology and artificial intelligence must also be accompanied by improvements in incomes and productivity, Anwar said. He added that economic progress should be judged by better jobs, wages and income distribution, rather than gross domestic product growth alone.

Budget 2027 includes government allocations of RM459.8 billion. Anwar said assistance would remain targeted and tied to available fiscal resources, acknowledging that the budget could not resolve every economic problem.