share on
Aligned with the second pillar, Malaysia aims to cement its position among the world’s top 12 most competitive economies by investing in high-growth, high-value (sectors.
Malaysia’s Budget 2026 will focus on strengthening governance, driving high-value economic growth, and lifting the rakyat’s living standards, marking the first fiscal plan under the 13th Malaysia Plan (13MP) and the fourth in the MADANI Budget series.
Anchored in the three pillars of Ekonomi MADANI – Driving reform & good governance, raising the ceiling, and raising the floor, the Budget will aim to combine structural reforms with targeted measures to ensure both economic competitiveness and inclusive prosperity.
Some of the things to be expected in the upcoming Budget, as shared by the Ministry of Finance (MOF) in its recent pre-Budget statement, are as follows:
Driving reform & good governance – Strengthening transparency and agility in the public sector
Under the first pillar, Budget 2026 will accelerate public sector reform with new legislation to reinforce transparency and integrity, alongside digitalisation initiatives to improve efficiency and service delivery. This includes the Government Procurement Act, State-Owned Enterprises Act, Ombudsman Act, and Freedom of Information Act, as well as GovTech platforms such as MyVisa 2.0 and MyJPJ.
Raising the ceiling – Catalysing high-value, competitive growth
Aligned with the second pillar, Malaysia aims to cement its position among the world’s top 12 most competitive economies by investing in high-growth, high-value (HGHV) sectors. Flagship initiatives such as the New Industrial Master Plan 2030 (NIMP 2030), National Energy Transition Roadmap, the National Semiconductor Strategy, and the National AI Plan 2026-2030 will be supported by RM120bn in targeted domestic investment and streamlined approval processes to attract and retain quality projects.
Raising the floor – Uplifting living standards and protecting the vulnerable
The third pillar focuses on targeted assistance to replace blanket subsidies, ensuring support reaches those most in need. Measures will cover labour market reform for sustainable wage growth, healthcare and education upgrades, and infrastructure improvements in underserved areas, alongside dedicated empowerment programmes for youth, women, senior citizens, persons with disabilities, indigenous communities, and the Bumiputera.
Recap: Malaysia’s eonomic and fiscal position in 2025
Looking ahead to Budget 2026, the Government has reaffirmed that Malaysia’s economic fundamentals remain resilient despite external headwinds. GDP growth in 2025 is projected within the official forecast range, supported by robust domestic demand and ongoing structural reforms. Fiscal discipline will be maintained, with the fiscal deficit targeted to narrow further from 4.3% of GDP in 2024 to 3.5% in 2025, in line with the Government’s medium-term fiscal framework. Revenue performance is expected to improve through enhanced tax compliance and the rationalisation of subsidies, while expenditure will be prioritised for high-impact projects and social safety nets.
In closing the Pre-Budget Statement, MOF said Budget 2026 is designed to balance economic transformation with social equity, ensuring that reforms are sustainable, inclusive, and future-ready. By anchoring policies in the MADANI Economy framework and aligning with the goals of the 13MP, the Government aims to deliver a fiscal plan that not only strengthens Malaysia’s competitiveness but also uplifts the well-being of all Malaysians.
ALSO READ: Malaysia to fully utilise RM227bn allocation for economic transformation under 13th Malaysia Plan
Photo / MOF
share on
