Kuala Lampur:First paragraph of the news story. The federal government's financial performance in 2025 showed improvement, with the deficit decreasing by RM3.878 billion. This reduction brought the deficit-to-gross domestic product (GDP) ratio down to 3.7 percent from 4.1 percent in 2024.

According to BERNAMA News Agency, the Auditor General's Report (LKAN) 2/2026 on the Federal Government Financial Statements for 2025 indicated that revenue collection by the federal government reached RM336.069 billion. This represents an increase of RM11.451 billion compared to RM324.618 billion in 2024.

Operating expenditure in 2025 totaled RM330.776 billion, resulting in a revenue surplus of RM5.293 billion. This surplus marks an increase of RM2.184 billion from the RM3.109 billion surplus recorded in 2024.

The report also highlighted a decrease in the development fund deficit by RM1.118 billion, or 10.6 percent, bringing it to RM9.420 billion compared to RM10.538 billion in 2024.

New borrowings by the federal government in 2025 amounted to RM185.577 billion, a decrease of RM16.671 billion, or 8.2 percent, from RM202.248 billion in 2024.

The annual growth rate of federal government debt showed a declining trend, from 10.2 percent in 2022 to 5.9 percent in 2025. Federal government debt increased by RM73.162 billion, or 5.9 percent, reaching RM1,320.776 billion compared to RM1,247.614 billion in 2024.

The report recommended that the federal government should enhance its revenue collection mechanisms with more strategic and effective measures to sustainably finance development expenditure. These measures aim to reduce the fiscal deficit and reliance on new borrowings.

Additionally, the report advised implementing more proactive enforcement and monitoring measures to expedite the collection of outstanding receivables, reduce arrears, and minimize the need for write-offs, which could lead to losses for the federal government.