Malaysia plans record budget spending in 2025 as reforms boost revenue
Malaysia to spend 421 bln rgt in 2025, govt reports say
Fiscal deficit seen at 3.8% of GDP in 2025
Growth seen at 4.5%-5.5% in 2025 vs 4.8%-5.3% in 2024
Govt to pursue further tax, subsidy reforms
By Danial Azhar, Ashley Tang
KUALA LUMPUR, Oct 18 (Reuters) -Malaysia announced on Friday record budget spending of 421 billion ringgit ($98 billion) for 2025, with the government boosting salaries and retirement funds for civil servants as it pursues further subsidy and tax reforms to bolster revenue.
The government said it was on track to narrow its fiscal deficit to 3.8% of gross domestic product (GDP) next year, from an estimated 4.3% in 2024.
Since taking office in 2022, Prime Minister Anwar Ibrahim has launched reforms to trim a hefty subsidy bill and reduce the deficit. The government said it will further improve revenue collection systems, including enforcing a global minimum tax from 2025, and pursuing further subsidy rationalisation.
Revenue is seen rising by 5.5% to 339.7 billion ringgit in 2025 from 322.1 billion ringgit this year, according to fiscal and economic outlook reports released alongside Friday's budget.
"Our commitment to prudent debt management and the transition to targeted subsidies are central to fiscal reform, ensuring a sustainable and strong financial position for Malaysia," Anwar said in the economic outlook report.
Anwar is set to address parliament at 4 p.m. (0800 GMT) when he will disclose more details of the budget.
The 2025 spending, up 3.3%on this year's 407.5 billion ringgit spending, includes development expenditure of 86 billion ringgit and operating expenditure of 335 billion ringgit.
Operating expenditure, which makes up nearly 80% of the budget, will rise 4.2% from 2024, primarily driven by public service restructuring that will see pay hikes and salary adjustments for 1.6 million government employees, the reports said.
Malaysia has allocated 52.6 billion ringgit for subsidies and social assistance in 2025, down from 61.4 billion this year.
The government has cut blanket subsidies for diesel, electricity, and chicken, among others, and plans to do the same for the widely used RON95 transport fuel as it shifts to a targeted approach that mainly helps lower-income groups.
State energy firm Petronas IPO-PETO.KL will pay the government a dividend of 32 billion ringgit in 2025, unchanged from this year, in anticipation of declining petroleum-related output and revenue.
Economic growth was forecast at 4.5% to 5.5% in 2025. This year's growth forecast was raised to 4.8% to 5.3%, from 4% to 5% previously, the reports showed.
The government said headline inflation was projected to remain manageable next year at between 2% to 3.5%, up from this year's revised estimate of 1.5% to 2.5%.
The federal government debt-to-GDP ratio was seen steady around 64% in 2025.
Despite a global easing cycle, the government said Malaysia's monetary policy was unaffected by the timing and policy path of other central banks and would continue to be guided by domestic considerations.
Bank Negara Malaysia has kept its benchmark interest rate at 3.00% since May 2023, with analysts expecting no changes until at least 2026.
($1 = 4.3070 ringgit)
Reporting by Rozanna Latiff, Danial Azhar and Ashley Tang; Editing by John Mair
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
