Jakarta:The Federal Government has projected the Budget 2027 to be RM459.8 billion, marking a 3.6 percent increase from the revised 2026 allocation. This budget accounts for 19.8 percent of the nation's gross domestic product (GDP).
According to BERNAMA News Agency, the Ministry of Finance (MoF) revised the 2026 Budget to RM441.1 billion from the earlier RM419.2 billion, reflecting adjustments in fiscal priorities and spending needs. The 2027 budget allocates RM376.8 billion for operating expenses (OE) and RM83 billion for development expenditure (DE).
The government will continue focusing on projects and programs benefiting the public, with 30.2 percent of the budget directed to the Ministry of Education, Ministry of Health, and Ministry of Defence.
The social sector will receive the highest allocation at RM161.6 billion, or 35.1 percent of total expenditure, emphasizing the government's focus on human capital and public welfare. Other sectors such as economic, security, and general administration will receive RM59.4 billion, RM46 billion, and RM23.4 billion, respectively. The remaining RM169.4 billion will be used for charged expenditures and transfer payments.
The OE, which represents 16.2 percent of GDP, is set to increase by 3.8 percent from the 2026 revision, with higher allocations for emoluments, retirement charges, and debt service charges (DSC). Emoluments remain the largest OE component at RM111.6 billion, growing by 2.9 percent. Subsidies and social assistance are expected to decrease slightly by 2.3 percent to RM72.7 billion. The DSC is projected to rise by 6.5 percent to RM61 billion.
For development expenditure, RM83 billion is earmarked for 2027, covering around 1,500 new programs and projects. The economic sector will receive the largest share at 45.4 percent, followed by social, security, and general administration sectors. The government plans to allocate at least three percent of GDP to DE, as per the Public Finance and Fiscal Responsibility Act 2023.
A significant portion, RM37.7 billion, is designated for the economic sector, focusing on strategic infrastructure expansion and investment promotion. The transport subsector receives RM17.6 billion to improve connectivity, while the environment subsector is allocated RM3.6 billion for climate change and conservation efforts. RM3.5 billion is set aside for trade and industry to boost industrial development and entrepreneurship.
The government will provide RM1 billion in loans through DE for infrastructure and quality of life improvements. State governments, companies, federal statutory bodies, and other organizations will be the primary recipients. Loan repayments are anticipated to total RM1.5 billion, with companies expected to make the highest repayments.