Malaysia aims for 3.3 per cent fiscal deficit in 2027
The government plans to lower the deficit to 3 per cent by 2028, while expecting its subsidy allocation to remain around RM40 billion in 2027.
Malaysia plans to reduce its fiscal deficit to 3.3 per cent in 2027, with a further reduction to 3 per cent targeted for 2028, Treasury secretary-general Tan Sri Johan Mahmood Merican said on October 12.
At the Malaysian Economic Association’s “Post-Budget 2027 Debate” in Kuala Lumpur, Johan said the government continued to prioritise fiscal consolidation to maintain investor confidence and demonstrate discipline in managing public finances.
The deficit target for 2026 is 3.6 per cent. It stood at 5.5 per cent in 2022 before falling to 3.7 per cent in 2025. Johan said the government remained committed to its fiscal pledges, guided by the Public Finance and Fiscal Responsibility Act 2023.
Johan said planning for 2027 took account of uncertainty in the Middle East and the prospect of higher oil prices. He estimated that the subsidy allocation would remain around RM40 billion, matching the 2026 allocation, but said adjustments would depend on circumstances. He noted that the government had made adjustments in 2026 when oil prices exceeded expectations.
