Kuala lumpur: The government is expected to table an expansionary Budget 2026, with the fiscal deficit projected at around 3.6 per cent of gross domestic product (GDP), compared with an estimated 3.8 per cent this year, according to an economist.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid stated that the government is likely to prioritise allocations for key sectors such as education, healthcare, and infrastructure. He noted that the government plans to focus on rakyat-centric initiatives, emphasizing improvements in basic infrastructure such as roadworks, irrigation systems, flood mitigation, and the construction or refurbishment of schools and hospitals.

Dr Mohd Afzanizam highlighted that the fiscal deficit for the first half of 2025 had narrowed to RM40.5 billion (or 4.2 per cent of GDP) compared with RM51.6 billion (or 5.5 per cent of GDP) in the same period last year. He conveyed optimism about the government’s trajectory in gradually narrowing the fiscal deficit, citing early signs of improvement. The ongoing fiscal consolidation exercise, including the introduction of new taxes, expansion of the sales and service tax scope, e-invoicing, and subsidy rationalisation, are expected to contribute to this fiscal improvement.

Prime Minister Datuk Seri Anwar Ibrahim, who also serves as the finance minister, is scheduled to table Budget 2026 in parliament on Oct 10.