Kuala Lumpur:Development expenditure is projected to rise by 3.8% to RM83 billion under Malaysia's Budget 2027, according to CIMB Securities.

According to BERNAMA News Agency, the government had previously allocated RM80 billion for development expenditure in Budget 2026. Analysts Kenny Mak Hoy Ken and Wei Yi Tan noted that an estimated RM9 billion reduction in petrol and diesel subsidies, bringing them down to RM32 billion in 2027, could create fiscal room for funding development projects.

In the first nine months of 2026, domestic project awards reached RM177 billion, which is 76% and 72% of the total value of jobs awarded in 2024 and 2025, respectively. However, public-funded projects accounted for only RM37 billion, or 57% and 63% of the levels recorded in the previous two years.

The analysts emphasized that, beyond the increased development expenditure projections for 2027, focus should be on project awards and execution, as some allocations may pertain to ongoing projects rather than new tenders. They also suggested that the timing of project awards might be advanced ahead of the 16th general election, which is due by February 2028.

The report anticipates that most infrastructure spending under Budget 2027 will be directed towards small- to mid-sized projects, aiming to reduce development disparities by allocating more funds to East Malaysia, particularly Sabah and Sarawak, as well as other interior regions. Key focus areas include water infrastructure, pipe replacements, flood mitigation, rural infrastructure, and grid investments.

Potential major infrastructure tenders under Budget 2027 could include the second phases of the Rasau and Langat 2 water supply schemes, Civil Main Contract 3 of the Penang Mutiara Line LRT, the Northern Perak Water Supply Scheme, and new road and utility projects in Sabah and Sarawak.