Is Malaysia’s fiscal health on the mend? BMI says yes in post-Budget forecast
BMI forecasts that Malaysia's fiscal deficit will narrow to 3.4% of GDP by 2027, supported by resilient economic growth and increased revenue. Despite high operating expenditures, the government's fiscal health is expected to improve as reliance on petroleum-related income gradually decreases.
Why it matters
Fiscal health forecasts are essential for investors and policymakers to assess the economic stability and creditworthiness of a nation.
KUALA LUMPUR, Oct 13 — BMI has maintained its forecast for Malaysia’s fiscal deficit to narrow to 3.4 per cent of gross domestic product (GDP) in 2027 from an estimated 3.6 per cent in 2026.
The Fitch Solutions unit said it expects the government to attain its 2027 revenue target of RM380.8 billion, a 4.7 per cent year-on-year (y-o-y) increase from the upward revised 2026 target of RM363.3 billion.
“We anticipate that revenue collections will benefit from a favourable growth backdrop.
“The Ministry of Finance had revised higher its 2026 growth projections to 4.8-5.3 per cent (BMI: 5.1 per cent) from 4.0-5.0 per cent previously. It expects growth to moderate to 4.2-5.2 per cent in 2027 (BMI: 4.5 per cent),” BMI said in a statement.
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