Malaysia’s Prime Minister Anwar Ibrahim has tabled a record RM459.8 billion budget for 2027, pairing household support with spending on public services and infrastructure. Presented as the country approaches its next general election deadline, the plan also aims to keep deficit reduction on track amid higher subsidy costs and uncertain global conditions.
Key takeaways
- Total spending is budgeted at RM459.8 billion, 3.6% above revised 2026 expenditure.
- Cash assistance is set to rise to RM16 billion, while the minimum wage will increase to RM2,000 a month from June 2027 for larger businesses.
- The government forecasts a 3.3% fiscal deficit in 2027, down from 3.6% in 2026.
- Development spending of RM83 billion includes funding for transport, education, healthcare and housing.
Household support takes centre stage
Anwar framed the budget around the cost of living, with RM16 billion allocated to the Rahmah Cash Contribution and Basic Rahmah Contribution programmes. The government said eligible recipients could receive up to RM150 a month through SARA, while a separate RM100 payment is planned twice for eligible adults. The wider package also includes a higher individual tax-relief limit, increasing from RM9,000 to RM12,000, and a one-percentage-point tax cut for some middle-income brackets.
The minimum wage is scheduled to rise from RM1,700 to RM2,000 a month in June 2027. Businesses with annual revenue below RM50 million are temporarily exempt, allowing smaller firms time to adjust. The budget also expands eligible tax relief to include certain care costs and vaccinations for pets adopted from registered centres—a detail of interest to pet-owning households. PAWSONA’s cat-care guidance, meanwhile, focuses on helping owners maintain stable, low-stress home routines as household circumstances change.
Spending and fiscal targets
Operating expenditure is projected at RM376.84 billion, about 82% of the budget, while development expenditure is set at RM83 billion. Major operating costs include public-sector pay, pensions, debt servicing and subsidies. Subsidies and social assistance are forecast at RM72.73 billion, slightly below the revised 2026 estimate but still above RM70 billion.
The government expects revenue to reach RM380.8 billion and the deficit to narrow to 3.3% of gross domestic product. That follows a 2026 deficit target revised upward to 3.6%, partly as higher energy costs lifted subsidy spending. Petronas is expected to contribute a RM32 billion dividend in 2027, up from a revised RM27 billion estimate for 2026.
Investment, growth and the political calendar
The development allocation includes RM37.66 billion for the economic sector, with RM17.56 billion earmarked for transport projects, including the Penang LRT Mutiara Line and the Sabah section of the Pan Borneo Highway. Education and training receive RM13.55 billion, healthcare RM6.91 billion, and housing RM1.68 billion.
The government forecasts 2027 growth of 4.2% to 5.2%, with inflation at 1.8% to 2.8%. The next general election must be held by February 2028, placing the budget in a politically consequential period. Its combination of cash aid, wage measures and investment may address immediate pressures, while the narrowing deficit target will test whether the government can sustain support and fiscal consolidation together.
- Malaysia plans RM459.8 billion budget for 2027 ahead of possible election, Awani International.
- Budget 2027 expected to hit record RM459.84b, 82% for operating expenditure, The Edge Malaysia.
- Malaysia budget 2027: Anwar pours billions into election spending, The Straits Times.
- Malaysia Budget 2027: Highlights of PM Anwar's speech on 9 October, Human Resources Online.