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2025-09-17 17:25:31
[Malaysia's budget seeks progress while maintaining stability: the delicate balance between fiscal consolidation and economic growth] ⑴ Malaysia's 2026 budget will be announced on October 10. OCBC Research shows that despite the unfavorable external environment, fiscal consolidation will continue to advance moderately. ? The fiscal deficit as a percentage of GDP is expected to decline from 3.8% in 2025 to 3.4%-3.6% in 2026, reflecting prudent fiscal management. ⑶ Economic growth is forecast to be 3.9% in 2025 and 3.8% in 2026, with tax stability and subsidy reforms providing support for the economy. ⑷ Expanding the sales and services tax base and implementing electronic invoices will increase fiscal revenue and enhance economic resilience. ⑸ Civil servant salary increases, pensions, and measures to support households and businesses will increase spending pressure, requiring careful balance. ⑹ The Bank Negara Malaysia is expected to keep interest rates unchanged in November, but may cut interest rates by 25 basis points in the first half of 2026, reflecting policy flexibility.
