Kuala lumpur: Budget 2027 should move Malaysia's artificial intelligence (AI) agenda beyond data centre construction towards enterprise adoption, domestic intellectual property, cybersecurity, and workforce productivity. MBSB Investment Bank Bhd (MBSB IB) suggests a shift towards supply-side efficiency by broadening the tax base, closing leakages, expanding consumption excises, introducing carbon pricing, rationalising spending, and encouraging private investment.
According to BERNAMA News Agency, MBSB IB emphasized that Budget 2027 should not only be evaluated through fiscal expenditure but also in terms of strengthening Malaysia's broader investment ecosystem and mobilizing domestic capital. The bank's wish list focuses on policy certainty, transparent project implementation, outcome-based incentives, and measures that direct long-term savings into productive investments.
The investment bank further stated that a successful budget would not only provide near-term economic support but also improve access to growth capital, strengthen domestic capabilities, and help translate Malaysia's investment cycle into sustainable productivity, higher-quality employment, and long-term economic value. MBSB IB also highlighted the importance of publishing a multi-year project pipeline, detailing project values, tender timing, funding sources, and execution milestones to enhance planning and reduce speculative market movements.
Budget 2027 is scheduled to be tabled on October 9, 2026, marking the fifth MADANI Budget and the second budget under the 13th Malaysia Plan. MBSB IB predicts the budget to remain moderately expansionary, with total federal government expenditure potentially reaching a new record of around RM440.9 billion, up from Budget 2026's RM421.2 billion. The larger allocation is likely to reflect higher operating expenditure, continued social and cost-of-living support, as well as increased development spending.
Development spending is expected to rise to between RM85 billion and RM90 billion, compared to RM81 billion in Budget 2026. The fiscal deficit is anticipated to narrow to around 3.3 percent to 3.5 percent of Gross Domestic Product (GDP) in 2027. Meanwhile, federal government revenue is projected to improve, bolstered by increased direct and indirect tax collections due to sustained economic growth, efforts to broaden the revenue base, and enhanced fiscal collections.
For 2026, the Ministry of Finance had initially projected revenue of RM343.1 billion, underpinned by better tax collection and digitalization initiatives. Total revenue is estimated to reach RM365.1 billion the following year.