KUALA LUMPUR, Oct 12 — Malaysia is targeting a fiscal deficit of 3.3 per cent next year as it presses ahead with plans to bring the figure down to 3 per cent by 2028, Treasury secretary-general Tan Sri Johan Mahmood Merican said today.
Speaking at a panel discussion titled “Post-Budget 2027 Debate” organised by the Malaysian Economic Association in Kuala Lumpur, Johan said fiscal consolidation remained a key government priority, particularly in maintaining investor confidence.
“This is an area where the government is placing strong emphasis on.
“This is so Malaysia can demonstrate our ability to execute disciplined and prudent financial management.
“As such we remain committed to the pledges made under the Fiscal Responsibility Act — so that we can achieve a fiscal deficit as low as three per cent by 2028,” he said.
The government is targeting a fiscal deficit of 3.6 per cent this year, after reducing it from 5.5 per cent in 2022 to 3.7 per cent in 2025.
Johan said uncertainty in the Middle East and the possibility of higher oil prices had been factored into the government's planning for next year.
“Consequently, we estimate that this year’s subsidy allocation of around RM40 billion will be maintained into next year.
“However, just as was practiced this year when oil prices rose higher than anticipated, we will make adjustments according to circumstances,” he said.
The government's fiscal consolidation efforts are guided by the Public Finance and Fiscal Responsibility Act 2023, which provides a framework for responsible management of public finances.