The Malaysian government remains steadfast in its commitment to reducing the fiscal deficit, projecting a decline to 3.8% by 2025. Finance Minister II, Datuk Seri Amir Hamzah Azizan, emphasized that the Madani government is dedicated to a gradual and consistent approach in lowering the deficit rate—from 5.5% in 2022 to 5% in 2023, followed by 4.1% in 2024.
This strategic deficit reduction is accompanied by a decrease in new debt issuance, with government borrowings reducing from nearly RM100 billion in 2022 to RM92.6 billion in 2023, and further down to approximately RM77 billion in 2024. The government’s efforts are aligned with ensuring the debt-to-GDP ratio remains below 60%, reinforcing economic stability.
Achieving Fiscal Responsibility for a Stronger Economy
According to Datuk Seri Amir Hamzah, the government is on track to meet the fiscal targets outlined in the Public Financial Act and Fiscal Responsibility Act (FRA) 2023. The aim is to achieve a 3% deficit by the end of 2028, reinforcing sustainable financial management practices.
To support this goal, the government plans to reduce development expenditure allocation to RM86 billion under Budget 2025. However, economic growth will still be stimulated through:
- Public-Private Partnership (PPP) Projects valued at RM9 billion.
- Direct Domestic Investments by Government-Linked Investment Companies (GLIC) amounting to RM25 billion.
This strategic approach increases public investment to RM120 billion for 2025, ensuring continuous economic growth while maintaining prudent financial management.
The government’s strong fiscal policies and responsible debt management highlight its dedication to long-term economic stability. With these measures in place, Malaysia is poised to achieve a healthier financial outlook while fostering growth and investment in key sectors.
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