PETALING JAYA: While Budget 2027 strikes a pragmatic balance between easing cost-of-living pressures and supporting economic growth, the sustainability of government spending and the ability to translate measures into lasting economic gains remain key concerns.
The government has increased the allocation for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara) to RM16bil from RM15bil, while total subsidies, assistance and incentives are expected to exceed RM80bil, including RM40bil for fuel subsidies.
Although Putrajaya is targeting a narrower fiscal deficit of 3.3% of gross domestic product (GDP) in 2027, from an estimated 3.6% this year (above the original 3.5% target), the substantial subsidy bill and exposure to volatile global oil prices remain risks to its fiscal consolidation efforts.
At the same time, the budget is directing resources towards longer-term growth drivers, including RM83bil in development expenditure and investments in semiconductors, artificial intelligence (AI), infrastructure and renewable energy.
...