Malaysia’s total spending and investment will increase to RM510 billion in 2027 from RM470 billion this year, with the government targeting a lower fiscal deficit of 3.3% of gross domestic product (GDP).
Prime Minister Datuk Seri Anwar Ibrahim said the allocation comprises RM376.8 billion in federal operating expenditure, RM83 billion in development expenditure, RM25 billion in Government-Linked Investment Companies (GLICs) investments, RM11 billion in public-private investments and RM14.2 billion in investments by federal statutory bodies and Minister of Finance Incorporated companies.
Compared with Budget 2026, operating expenditure will rise by RM38.6 billion from RM338.2 billion, while development expenditure increases by RM2 billion from RM81 billion.
GLIC investments will decline by RM5 billion from RM30 billion, while public-private investments rise by RM1 billion from RM10 billion. Investments by federal statutory bodies and MOF Inc companies will increase by RM3.4 billion from RM10.8 billion.
Federal revenue is projected to reach RM380.8 billion in 2027, up from an estimated RM363.6 billion in 2026. The latest estimate for this year is already above the original projection of RM343.1 billion.
The government now expects the fiscal deficit to reach 3.6% of GDP this year, compared with its initial target of 3.5%, as the West Asia conflict pushes fuel subsidies to RM40 billion.
For 2027, the government aims to narrow the deficit to 3.3% of GDP, with a further reduction to 3% targeted by 2028.
Federal government debt is projected to ease to 63.7% of GDP in 2027, from 64% this year and 65.2% in 2025.
