KUALA LUMPUR, Sept 30 — Budget 2026 will serve as a fiscal and policy anchor to navigate near-term challenges, while laying the groundwork for sustainable and inclusive development, said RHB Investment Bank Bhd (RHB IB).
As the first budget under the 13th Malaysia Plan (13MP) and the fourth in the Madani series, it 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,” it said in a note today.
RHB IB added that 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.
The fiscal deficit target is likely to be set at 3.5 per cent of the 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,” it said.
Additionally, RHB IB expects a development expenditure allocation of between RM86 billion and RM89 billion in Budget 2026, in line with the total allocation of RM430 billion for 2026-2030 under the 13MP.
“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 said.
