Standard Chartered Malaysia has welcomed Budget 2027’s focus on fiscal discipline, high-value investments and business financing, saying the measures will strengthen Malaysia’s position as a regional hub for trade, sustainable finance and foreign direct investment (FDI).
Its Interim Chief Executive Officer, Head of Coverage and Chief Financial Officer, Mushahid Syed, said the RM510 billion budget strikes a constructive balance between supporting near-term economic growth and strengthening the country’s long-term competitiveness.
He said the government’s commitment to narrowing the fiscal deficit to 3.3% of gross domestic product (GDP) in 2027, alongside projected federal revenue of RM380.8 billion, sends a positive signal to investors, credit rating agencies and financial markets.
The continued emphasis on the New Industrial Master Plan 2030 (NIMP 2030), National Energy Transition Roadmap (NETR), National Semiconductor Strategy, artificial intelligence (AI) and supply-chain diversification would also reinforce business confidence.
These initiatives, he said, create opportunities for banks to support SMEs, mid-tier companies and the green economy through working capital, transition financing and digitalisation.
“The measures to strengthen the investment ecosystem – from the JS-SEZ and energy transition to carbon pricing and the mobilisation of long-term domestic capital – will enhance Malaysia’s competitiveness as a regional hub for trade, sustainable finance and high-value investment,” Mushahid said in a statement.
Mushahid highlighted the Johor-Singapore Special Economic Zone (JS-SEZ) as a major catalyst for cross-border investments, noting that RM132 billion in investments had been recorded in the economic zone.
He said the upcoming JS-SEZ masterplan and blueprint, including the proposed Nexus Sedenak industrial development, could further strengthen investment momentum.
Nexus Sedenak is expected to attract potential investments of RM12 billion and create 45,000 jobs.
Standard Chartered also welcomed the RM100 million strategic investment fund by Khazanah Nasional and InvestPenang to support semiconductor and advanced manufacturing companies.
The proposed Sibu Special Economic Zone and further development of the Delapan Special Border Economic Zone, including the 122-acre NCT InnoSphere logistics and engineering hub, were also identified as initiatives that could strengthen Malaysia’s regional competitiveness.
Mushahid said the development of a cross-border funding framework to facilitate multi-currency financing and transactions would further support Malaysia’s position as an ASEAN trading hub.
On business financing, Standard Chartered welcomed the RM32 billion allocated through Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) and Credit Guarantee Corporation Malaysia Bhd to improve financing accessibility for businesses.
The expanded guarantee coverage will include mid-sized companies across all sectors, with the guarantee limit increased to RM50 million.
An additional RM1 billion in SJPP guarantees has been earmarked to support the expansion of Malaysian companies through mergers and acquisitions.
The bank also highlighted the RM5 billion financing facility for SMEs affected by the Middle East conflict and RM6.6 billion in microfinancing for 2027.
Mushahid said these measures would help businesses navigate external uncertainties while supporting their expansion and competitiveness.
To encourage international expansion, the government has allocated RM60 million to the Malaysia External Trade Development Corporation (MATRADE), alongside RM1 billion in financing from Bank Pembangunan Malaysia Bhd to help local MSMEs explore export markets.
Meanwhile, RM2.1 billion from several investment funds, including KWAP’s Dana Pemacu and Khazanah Nasional’s Mid-Tier Company Fund, will support mid-tier businesses in sectors such as electrical and electronics, digital technology, aerospace and medical devices.
The bank also welcomed measures supporting Bumiputera enterprises, including RM7.5 billion in reserved government procurement for G1 to G4 contractors, RM1 billion in TERAJU financing and the RM250 million Dana Ciptawan for growing mid-sized Bumiputera companies.
On sustainability, Mushahid described the extension of green technology tax incentives until 2030 as a timely measure to encourage greater private-sector investment in low-carbon activities.
Under Budget 2027, companies investing in qualifying green technology projects, electric vehicle charging stations and green assets for their own use will be eligible for investment tax allowances of up to 100%.
He said these incentives would support businesses transitioning towards cleaner operations while strengthening Malaysia’s sustainable investment ecosystem.
Standard Chartered said sustainable finance remains a key focus for the bank, including helping corporate clients access financing solutions that support their transition to a low-carbon economy.
The bank also welcomed the government’s continued commitment to carbon pricing and the mobilisation of long-term domestic capital to support sustainable development.
Mushahid stressed that Malaysia’s ability to attract quality investments would increasingly depend on workforce productivity, technical capabilities and the availability of skilled talent.
Budget 2027 allocates RM8 billion for technical and vocational education and training (TVET), alongside three million training opportunities through HRD Corp and 30,000 targeted employment opportunities under Bakat MADANI.
He said the emphasis on digital skills, AI and technical training aligns with the workforce requirements of semiconductors, advanced manufacturing and other strategic industries.
However, he cautioned that sustainable wage increases must be accompanied by stronger productivity, business expansion and skills development.
Measures to help SMEs adapt to wage reforms would therefore be important, given their contribution to employment and the domestic economy.
Mushahid said the development of a technically sophisticated and adaptable workforce would strengthen Malaysia’s participation in global value chains while helping domestic businesses expand across ASEAN and international markets.
Standard Chartered also welcomed measures aimed at strengthening Malaysia’s position as a global Islamic finance and fund management centre.
These include a 40% income tax exemption for providers of Shariah-compliant fund management services for assessment years 2028 to 2030.
The government will also provide tax deductions on Securities Commission-approved issuance costs for Sukuk PRISMA from 2027 to 2030.
Additionally, grants received under the Sustainable and Responsible Investment (SRI) Sukuk and Bond Grant Scheme will be exempted from income tax beginning Jan 1, 2027.
Mushahid said these measures would encourage sustainable Shariah-compliant financing while supporting the growth of Malaysia’s Islamic capital market.
Overall, Standard Chartered believes Budget 2027 provides a foundation for strengthening Malaysia’s fiscal resilience, improving household incomes and accelerating investment in higher-value industries.
