Prime Minister Datuk Seri Anwar Ibrahim’s announcement of six immediate measures on the eve of Malaysia’s National Day has prompted economists to anticipate that Budget 2027 will adopt an expansionary and more people-centric approach. The budget is expected to be tabled on October 9.
Bank Muamalat Malaysia Bhd’s chief economist, Mohd Afzanizam Abdul Rashid, projected that the budget could target a fiscal deficit of around 3.5% of gross domestic product (GDP). He noted that the measures, particularly increased allocations for subsidised fuel, may help mitigate inflationary pressures in the latter half of the year.
Echoing this view, Sunway University economics professor Dr Yeah Kim Leng said the budget was likely to increase in step with economic growth at current prices, supported by anticipated rises in government revenue. He observed that since positive economic momentum is expected to persist into 2027, and with an election cycle forthcoming, the government may adopt an expansionary fiscal stance. Dr Yeah also highlighted that the Budi95 fuel subsidy is expected to be maintained next year, which would require budgetary provisions reflecting both higher allocations and anticipated savings from reduced subsidy leakages and cross-border smuggling.
Meanwhile, Ilham Centre executive director Hisommudin Bakar urged caution in interpreting the recent measures as signs of an imminent general election. He suggested the announcements aimed primarily to address public concerns over the rising cost of living. Hisommudin emphasized that the measures signaled increased attention to the M40 income group, which historically has felt excluded from government assistance programs targeted at lower-income groups. He argued that the government appears intent on broadening support beyond the B40 category to reflect the financial pressures experienced by middle-income households.
From a political standpoint, Hisommudin acknowledged that the timing of the measures could serve to bolster public confidence following setbacks experienced by the ruling coalition, Pakatan Harapan, in recent Johor and Negeri Sembilan state elections. The initiatives may thus represent an early indication of a more citizen-focused Budget 2027 while shaping a positive narrative ahead of the upcoming parliamentary session and a potential Melaka state election.
Economist Dr Shankaran Nambiar viewed the announced measures as providing some relief but questioned their overall effectiveness. He expressed concern about the exemption of businesses with annual sales below RM3 million from e-invoicing requirements, suggesting this could reduce transparency for smaller transactions and complicate tax enforcement. Dr Nambiar speculated the exemption might allow smaller traders to develop without immediate compliance costs but leave larger market players under closer scrutiny.
In the healthcare sector, Dr Nambiar welcomed the increased budget allocation but questioned whether digitalisation should be the main focus, pointing instead to ongoing issues such as shortages of medical professionals and limited public healthcare capacity.
The six measures unveiled on August 30 include expanded fuel subsidy eligibility, additional support for small businesses, increased school maintenance funds, and enhancements to digital healthcare services. These steps appear aimed both at easing immediate cost-of-living challenges and shaping fiscal priorities for the coming year.