Hanoi:The effectiveness of Budget 2027's implementation hinges on the timely distribution of aid and the coordination between federal, state, and local governments to alleviate bureaucratic challenges faced by businesses, an economist has noted.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, pointed out that bureaucratic red tape poses a risk due to the involvement of multiple ministries and agencies at the federal level, alongside state governments and local authorities. He emphasized the necessity for these components to be closely monitored to ensure smoother business operations.

Dr. Mohd Afzanizam stressed that government machinery at all levels needs to show empathy towards the business sector, which faces challenges such as rising raw material, labor, and compliance costs. The hidden costs associated with compliance regulations can impact business performance significantly.

He further highlighted the need for effective coordination among the three levels of government to improve business operations and enhance competitiveness in the business and industrial sectors in the future.

Dr. Mohd Afzanizam also described Budget 2027 as pragmatic, acknowledging the government's efforts to address difficulties faced by the population and businesses through various assistance measures and tax reductions. He noted the government's commitment to maintaining fiscal discipline, aiming to reduce the fiscal deficit to 3.3 percent of GDP in 2027 from 3.6 percent in 2026.

The federal government has allocated RM459 billion for the budget, an increase from the RM444 billion allocated in 2026. Dr. Mohd Afzanizam believes this approach is practical, addressing issues faced by households and businesses while ensuring fiscal discipline in managing government finances.