FX.co ★ Malaysia Unveils Recod MYR 470 Billion Budget for 2026

Prime Minister Anwar Ibrahim has unveiled a record-setting budget of MYR 470 billion for the year 2026, which includes investments from state-linked enterprises. Anwar emphasized the government's commitment to enhancing tax revenue and fortifying social protections, all while upholding fiscal discipline in the face of global uncertainties. “We have opted for the challenging path of reform, strict fiscal discipline, and institutional strengthening,” he articulated. Key initiatives encompass the introduction of a carbon tax next year targeting the iron, steel, and energy sectors, an increase in excise duties on alcohol and tobacco starting in November, and the full implementation of e-invoicing to improve tax compliance. Malaysia anticipates annual savings of MYR 15.5 billion from subsidy reforms and intends to concentrate efforts on sectors such as microchips, digital technology, and the energy transition, allocating MYR 5.9 billion specifically for AI research and development. The fiscal deficit is expected to decrease to 3.5% of GDP by 2026, with economic growth projected at 4–4.5%, and inflation anticipated to range between 1.3% and 2%.