Anwar Readies Budget 2027 With Cash Handouts as Election Looms — SkimNews
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- Anwar Ibrahim is set to present Budget 2027 to Parliament on Oct 9, with economists expecting cash handouts to middle-income groups and increased tax reliefs as the centerpiece amid rising living costs.
- The 79-year-old premier's Pakatan Harapan coalition has suffered setbacks in successive state elections, and he is said to be considering calling nationwide polls in H2 2027 ahead of the February 2028 deadline.
- On Aug 30, Anwar restored subsidized fuel quotas benefiting 16 million people, with state fuel subsidy spending projected to climb to RM40 billion in 2026 — more than double the RM15 billion originally allocated.
- Anwar has signaled a possible minimum wage hike from the current RM1,700 (S$530), with Economy Minister identifying higher wages as a key priority for Budget 2027.
- Economists forecast a narrower 2027 fiscal deficit of 3.4% of GDP, supported by faster-than-expected 6% Q2 GDP growth, though OCBC's Venkateswaran warned fiscal consolidation may prove challenging given subsidy pressures.
- Malaysia's semiconductor and renewable-energy sectors are expected to receive further tax incentives, grants, and financing, building on AI-driven export growth and Malaysia's 2050 net-zero target.
- Azizul Amiludin of the Malaysian Institute of Economic Research cautioned that cost-of-living issues are structural, arguing they require sustained long-term policy measures rather than one-off budgetary support.
- Bank Negara Malaysia expects 2026 GDP growth of about 5% — the upper end of its 4%-5% forecast — with inflation within its 1.5%-2.5% outlook after consumer prices rose 1.9% year-on-year in August.
Why it matters: With RM40 billion in fuel subsidies, expanded handouts, and potential minimum wage hikes, Anwar's pre-election budget could push the 2026 deficit to 3.6% of GDP above its 3.5% target — a gamble that trade-offs fiscal discipline for voter appeal while economists warn structural cost-of-living issues won't be solved by one-off cash transfers.
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