Malaysia Unveils Deficit Budget Plan to Boost Household Income and SME Growth

Key summary

Datuk Seri Anwar Ibrahim, Malaysia's Prime Minister and Finance Minister, presented the 2027 fiscal budget to parliament with a deficit expansion of RM45.98 billion (approx. THB378.9 billion) aimed at stimulating household income and supporting small businesses amidst global oil price pressures. The administration plans to raise the minimum wage from RM1,700 to RM2,000 per month starting next June, exempting MSMEs with annual revenues under RM50 million temporarily. New graduate and semi-skilled wages will be set at RM2,500 monthly. Personal income tax relief ceilings increase from RM9,000 to RM12,000 annually, the first adjustment since 2010. Petronas dividends of RM3.2 billion are expected to support a GDP growth forecast of 4.2% to 5.2%. Subsidies for energy and social welfare are projected at RM7.27 billion, with a target to reduce the budget deficit to 3.3% of GDP. The Thai Consulate General notes these policies will boost domestic demand, benefiting Thai exports in consumer goods, processed food, agricultural innovations, beauty products, and lifestyle items, though rising labor costs and potential long-term energy subsidy reductions may impact operational expenses for Thai businesses.