Accra:RHB Bank Bhd has maintained its 2027 gross domestic product (GDP) growth forecast for Malaysia at 4.9 percent, following the announcement of Budget 2027.

According to BERNAMA News Agency, this projection is towards the upper end of the government's official projection range of 4.2-5.2 percent. RHB noted that Budget 2027 adopts a moderately expansionary and growth-supportive stance, balancing inclusive nation-building with fiscal sustainability.

The budget aims to support the domestic economy through three key priorities lifting household incomes to sustain private consumption, strengthening micro, small, and medium enterprises (MSMEs) resilience and competitiveness, and catalyzing investment for longer-term growth. Private consumption is expected to be bolstered by higher wages and household incomes, targeted cash assistance, and measures to ease cost-of-living pressures.

Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, presented Budget 2027, themed "Reaching for the Skies, While Anchored on Our Values," in Parliament. The budget totals RM459.8 billion in federal government expenditure, with RM376.8 billion allocated for operating expenditure and RM83 billion for development expenditure.

RHB Bank highlighted that the increased development expenditure, transport infrastructure projects, special economic zones, and strategic industry incentives are expected to attract quality investments and support Malaysia's transition towards higher-value activities.

The bank also mentioned that fiscal consolidation remains on track, with the fiscal deficit projected to narrow to 3.3 percent of GDP in 2027 from an estimated 3.6 percent in 2026. Consequently, total federal debt is expected to decline to 60.3 percent of GDP in 2027, closer to the statutory ceiling of 60 percent. Revenue growth will be driven by economic activity, resilient consumption, and returns from government-linked assets, with spending efficiency being crucial for achieving fiscal targets.