Federal deficit falls to RM75.3 billion in 2025
New federal borrowing declined 8.2% to RM185.577 billion, while auditors identified weaknesses in receivables and development project management.
Malaysia’s federal government recorded a fiscal deficit of RM75.3 billion for 2025, a decline of 4.9%, according to the auditor general’s report. The deficit represented 3.7% of gross domestic product.
Revenue reached RM336.069 billion, an increase of RM11.451 billion from the RM324.618 billion recorded in 2024. Against operating expenditure of RM330.776 billion, the government posted a revenue surplus of RM5.293 billion. That was RM2.184 billion higher than the 2024 surplus of RM3.109 billion.
New borrowing totalled RM185.577 billion in 2025, down 8.2% from RM202.248 billion a year earlier. Repayment of maturing principal accounted for RM106.144 billion of the new borrowings, while the Development Fund received RM75.560 billion for development projects.
The report also showed that federal debt growth slowed from 10.2% to 5.9% over the five-year period spanning 2021 to 2025.
The auditor general gave the government’s financial statements an unmodified opinion, accompanied by paragraphs on “other matters”. This indicates fair preparation in line with accounting standards and no significant misstatements. However, auditors flagged weaknesses involving government receivables and the management of development projects.
Outstanding contractor advances across 24 projects amounted to RM68.81 million. Of that, 86.7%, equivalent to RM59.63 million, was overdue by more than 10 years. Receivables relating to utility relocation costs totalled RM90.50 million as at Dec 31, 2025; 92.8%, or RM84.05 million, had remained outstanding beyond 12 months.
