Kuala lumpur: There is no need to review current projections under Budget 2027 based on the government's fiscal performance for the first half of 2026, said Deputy Finance Minister Liew Chin Tong. However, he stated that the government would continue to monitor current developments until Budget 2027 is tabled in October.
According to BERNAMA News Agency, Liew highlighted that higher oil prices had increased government subsidy expenditure by an estimated RM40 billion. He noted that every US$1 per barrel increase in world crude oil prices would likely add about RM300 million to petroleum-related revenue, excluding Petronas' dividend contribution. This revenue gain can help cover part of the increase in fuel subsidy expenditure, he explained during the Oral Answers session in the Dewan Rakyat.
Liew was responding to a supplementary question from Mohd Syahir Che Sulaiman (PN-Bachok) about the impact of increased fuel subsidies due to the West Asia conflict on the Budget 2027 framework, the 2026 fiscal deficit target, and the possibility of new taxes due to strains on the country's fiscal position. He emphasized that the government regularly monitors revenue collection performance to ensure it meets its operating expenditure needs amid geopolitical developments in West Asia.
Liew added that the government is monitoring the current economic situation through continuous weekly engagement sessions by the crisis management task force under the National Economic Action Council (NEAC) to ensure energy supplies and basic needs remain protected.
Commenting on the 2026 fiscal projections, Liew stated that the government has implemented immediate, comprehensive, and structured intervention initiatives to maintain overall government expenditure without affecting the country's fiscal position. Fiscal projections will be announced during the tabling of Budget 2027 after considering current economic indicators and the performance of government revenue collection and expenditure in the first half of 2026.
He expressed confidence that the medium-term fiscal consolidation trajectory can be maintained through targeted subsidies, restructuring expenditure priorities, improving spending efficiency, and bolstering revenue collection and tax compliance. Liew asserted that these measures would ensure the country's fiscal position remains sustainable while meeting government spending needs amid global economic uncertainties and current geopolitical developments.