Kuala lumpur: Budget 2026 will serve as a fiscal and policy anchor to navigate near-term challenges, while laying the groundwork for sustainable and inclusive development, according to RHB Investment Bank Bhd (RHB IB).
According to BERNAMA News Agency, as the first budget under the 13th Malaysia Plan (13MP) and the fourth in the MADANI series, the budget will play a crucial enabling role in reinforcing Malaysia’s economic resilience and positioning the country for medium-term growth. The budget is expected to focus on five key pillars: fiscal sustainability; economic stimulus and infrastructure development; social welfare and inclusivity; improving the business and investment climate; and advancing environmental, social, and governance (ESG) priorities.
RHB IB noted that measures are likely to include tackling cost-of-living pressures, strengthening support for micro, small, and medium enterprises (MSMEs), enhancing competitiveness through investment incentives, and accelerating the green transition. The investment bank stated that Budget 2026 is poised to act as both a stabiliser and a catalyst, providing targeted relief where needed, while driving strategic transformation to elevate Malaysia’s economic potential over the long term.
The fiscal deficit target is likely to be set at 3.5% of gross domestic product (GDP) for 2026, followed by 3.2% for the subsequent year, to meet midterm deficit targets. Under the Mid-Term Fiscal Framework (MTFF), the fiscal deficit is expected to continue consolidating, with the overall balance averaging 3.5% of GDP from 2025 to 2027. This is part of the effort to reduce the fiscal deficit to below 3% of GDP by 2030, in line with the 13MP target.
Additionally, RHB IB expects RM86 billion-RM89 billion to be allocated for development expenditure in Budget 2026, aligning with the 13MP total allocation of RM430 billion for 2026-2030. The allocation underscores a strong emphasis on infrastructure and regional connectivity, with the central priority being to strengthen regional mobility and promote more balanced development across states.