Budget 2025 Shows Consistency, But More Effort Needed To Boost Economic Complexity - Economist

KUALA LUMPUR, Oct 21 (Bernama) — The MADANI government has demonstrated improved consistency in its economic framework with the tabling of Budget 2025 last Friday, while also addressing the need to enhance the country’s economic complexity.

Commenting on the budget allocations, Malaysian Inclusive Development and Management Institute director Tan Sri Noor Azlan Ghazali noted that in contrast to previous budgets that focused primarily on sectoral allocations, Budget 2025 starts to address the need to improve the nation’s economic complexity.

“Previously, allocations were provided based on sectors, and I don't really subscribe to the idea of identifying which sectors. The idea of complexity should apply to all sectors.

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“That's why the idea of complexity is supposed to be translated to all sectors. There's no such thing as agriculture is not important,” he told reporters on the sidelines of the Post-Budget 2025 Debate, organised by the Malaysian Economic Association (MEA) here today.

It was reported that as of 2024, Malaysia is ranked 56th in the Economic Complexity Index (ECI) with an ECI score of 1.12 reflecting its position as a moderately complex economy.

Noor Azlan stressed that every sector should be given the opportunity to develop and increase its complexity.

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“You can’t say manufacturing is better. Perhaps we've focused too much on manufacturing and neglected agriculture. What matters most is advancing economic complexity across all sectors. For example, the New Industrial Master Plan 2030 (NIMP 2030) focuses on economic complexity, but it hasn’t received the attention it deserves,” he added.

The NIMP 2030 aims to deliver accelerated, holistic, broad-based growth to position Malaysia as a competitive industrial hub with high economic complexity.

Noor Azlan further noted that, compared to Budget 2024, Budget 2025 presents a clearer economic framework, especially in terms of the reforms the country needs.

“There are four to five key reforms highlighted in Budget 2025, including structural and regulatory reforms, which is a positive sign of consistency.

“However, challenges remain, such as tax issues. People continue to bring up the Goods and Services Tax (GST), which has not been entirely ruled out. We need a broader tax base rather than here and there,” he said.

He also emphasised the importance of focusing on implementation, despite the comprehensive plans that have been released.

“The Malaysian annual plans are often well thought out and detailed, but the challenge lies in execution and accountability. While the government has introduced the Fiscal Reform Act, perhaps a delivery reform is also needed. If we have a plan, we need to execute it, report back and ensure continuous monitoring,” he concluded.

-- BERNAMA