Budget 2026: Navigating Challenges With Fiscal, Policy Anchors – RHB IB
KUALA LUMPUR, Sept 30 (Bernama) -- Budget 2026 will serve as a fiscal and policy anchor to navigate near-term challenges, while laying the groundwork for sustainable and inclusive development, according to RHB Investment Bank Bhd (RHB IB).
As the first budget under the 13th Malaysia Plan (13MP) and the fourth in the MADANI series, the budget will play a crucial enabling role in reinforcing Malaysia’s economic resilience and positioning the country for medium-term growth.
“The budget is expected to focus on five key pillars: fiscal sustainability; economic stimulus and infrastructure development; social welfare and inclusivity; improving the business and investment climate; and advancing environmental, social and governance (ESG) priorities.
“It is likely to include measures to tackle cost-of-living pressures, strengthen support for micro, small and medium enterprises (MSMEs), enhance competitiveness through investment incentives, and accelerate the green transition,” the investment bank said in a note today.
RHB IB said Budget 2026 is poised to act as both a stabiliser and a catalyst—providing targeted relief where needed, while driving strategic transformation to elevate Malaysia’s economic potential over the long term.
It said the fiscal deficit target is likely to be set at 3.5 per cent of gross domestic product (GDP) for 2026, followed by 3.2 per cent of the GDP for the subsequent year, to meet the midterm deficit targets.
“Under the Mid-Term Fiscal Framework (MTFF), the fiscal deficit is expected to continue consolidating, with the overall balance averaging 3.5 per cent of GDP (2025-2027).
“This forms part of the effort to reduce the fiscal deficit to below three per cent of the GDP by 2030, in line with the 13MP target,” said RHB IB.
Additionally, the investment bank expects RM86 billion–RM89 billion to be allocated for development expenditure in Budget 2026, in line with the 13MP total allocation of RM430 billion for 2026–2030.
“The allocation for development expenditure underlines a strong emphasis on infrastructure and regional connectivity. The central priority will be to strengthen regional mobility and promote more balanced development across states,” it added.
-- BERNAMA