MADANI Govt Has Successfully Rebuilt Malaysia’s Fiscal Resilience -- PM Anwar
KUALA LUMPUR, Oct 9 (Bernama) -- The MADANI government has worked to rebuild Malaysia's fiscal resilience by bringing down the fiscal deficit from 6.4 per cent of gross domestic product (GDP) in 2021 to 3.6 per cent in 2026, with a further reduction to 3.3 per cent expected through gradual and measured fiscal consolidation.
Prime Minister Datuk Seri Anwar Ibrahim said the projection remained guided by the medium-term fiscal objectives under the Public Finance and Fiscal Responsibility Act 2023 [Act 850], in line with the MADANI government's efforts to strengthen the country's fiscal resilience through gradual and measured consolidation.
He said the experience of the 2020s, particularly in dealing with the COVID-19 pandemic and geopolitical conflicts in West Asia, had demonstrated the importance of maintaining a strong fiscal position to enable the government to retain the capacity to act, protect the rakyat and sustain the economy.
"The COVID-19 pandemic required extraordinary fiscal intervention, leaving the fiscal deficit at 6.4 per cent of GDP in 2021. Today, elevated energy prices and persistent supply-chain pressures are compounded by growing climate risks.
"For an open economy such as Malaysia, these shocks transmit rapidly into prices, subsidies, government revenue and public expenditure," he said in the preface to the Fiscal Outlook and Federal Government Revenue Estimates 2027, released by the Finance Ministry today.
Anwar, who is also Finance Minister, said fiscal prudence did not mean imposing excessive austerity measures that could undermine assistance to the people. Instead, better-targeted subsidies, reduced leakages and more efficient management of public resources would help ensure assistance reached those who needed it most while supporting economic growth.
He said Sumbangan Tunai Rahmah (STR), Sumbangan Asas Rahmah (SARA) and BUDI MADANI remained important pillars of support for households, particularly as global energy prices exerted renewed pressure on the cost of living. Assistance had also continued for affected businesses, especially micro, small and medium enterprises (MSMEs).
Anwar said achieving the 2027 fiscal target could not be accomplished through expenditure restraint alone but would require improvements in governance, revenue administration and compliance, as well as ensuring that subsidies genuinely benefited those who were eligible.
"Public-sector operations and procurement must become more efficient, while development expenditure must be directed towards programmes and projects that deliver the greatest public value," he said.
Anwar said institutional reform was therefore central to the fiscal agenda, including the implementation of the Government Procurement Act 2026 [Act 882], which provides a stronger framework for integrity, efficiency and accountability in public procurement.
In addition, the proposed legislation on government-owned entities and the transformation of the National Trust Fund into a full statutory body would reinforce its mandate, governance, funding arrangements and withdrawal rules.
Anwar said responsible public finance was not only about meeting the needs of Malaysians today but also about ensuring that the financial burden was not inherited by future generations.
"The lesson of Surah Yusuf is ultimately one of foresight, discipline and preparedness. We cannot assume that difficult years will always remain distant. Prudence is therefore not an end in itself. Its purpose is resilience: the capacity to withstand shocks, preserve stability and continue building for the future.
"Insha Allah, through sound governance, disciplined execution and responsible fiscal management, the MADANI government will preserve Malaysia's capacity to act today while leaving the nation stronger for our children tomorrow," he added.
-- BERNAMA