RM421 Billion Budget Aims to Strengthen Public Finances and Increase Revenue

Malaysia’s Prime Minister Anwar Ibrahim revealed a record budget of RM421 billion (S$127.8 billion) for 2025, marking a significant effort to boost the country’s fiscal health. The budget includes salary increases and enhanced retirement funds for civil servants as part of broader reforms aimed at narrowing the fiscal deficit, which is projected to drop to 3.8% of GDP in 2025 from an estimated 4.3% in 2024.

Anwar’s administration, in office since 2022, has focused on reducing the subsidy burden and improving revenue collection. As part of the fiscal strategy, Malaysia will implement a global minimum tax starting in 2025 and continue its efforts to rationalize subsidies. The government expects revenue to rise by 5.5% to RM339.7 billion in 2025, up from RM322.1 billion this year.

Anwar emphasized the government’s commitment to prudent debt management and targeted subsidies as part of its long-term fiscal sustainability plans. He is scheduled to provide further details of the budget in his address to parliament later on Friday.