Prime Minister Datuk Seri Anwar Ibrahim said Budget 2027 will feature additional cost-cutting measures as global economic uncertainties and geopolitical tensions continue to weigh on Malaysia’s fiscal position.
Anwar said ministries would be required to identify savings despite appeals for higher allocations, stressing that prudent spending was necessary amid the economic fallout from ongoing conflicts involving the United States, Israel and Iran.
“The impact of these attacks has affected our economy as well, so do not take lightly the new decisions we make,” he said.
“We have asked ministries, including the Ministry of Education and the Ministry of Higher Education, to make their case. However, there must be reductions within departments because it is impossible that savings cannot be achieved from that RM20 billion.”
Despite the planned spending cuts, Anwar assured that the government would continue to safeguard education quality and maintain basic facilities at schools and public universities.
He stressed that reductions in allocations should not affect essential services, particularly those related to teaching, learning and student welfare.
He also urged ministries and agencies to avoid working in silos, saying policymakers must understand the country’s economic challenges from a broader macroeconomic perspective.
According to him, while every ministry plays an important role in national development, spending decisions must be guided by priorities and actual needs to ensure resources are utilised effectively.
“In the current situation, everyone must be rational and wise in understanding the problems and making improvements. Take the opportunity to address weaknesses, improve where necessary, reduce costs where possible and, at the same time, set the right priorities,” he said.
Anwar’s remarks signal a stronger emphasis on fiscal discipline in Budget 2027 as the government navigates a challenging external environment marked by geopolitical tensions, global economic uncertainty and rising expenditure pressures.
