Malaysia 2026 budget to boost social aid amid rising living costs 💸

Oct 09, 2025

✅ Prime Minister Anwar Ibrahim will table Malaysia’s 2026 national budget on Oct. 10, 2025, in Parliament.

💬 The budget is widely expected to expand public subsidies and targeted social assistance to ease persistent cost-of-living pressures while maintaining a cautious stance on fiscal consolidation.
✅ The plan will be the first budget under the upcoming 13th Malaysia Plan (2026–2030) — Malaysia’s five-year economic blueprint.
💬 Policy focus areas are expected to include inclusive growth, energy transition, and industrial competitiveness, aligning fiscal priorities with the new medium-term plan.

💰 Cost-of-living strains remain Malaysia’s top household concern, prompting calls for stronger welfare and food-security measures.
⚙️ Fiscal reforms — including the expanded Sales and Service Tax (SST) and fuel-subsidy rationalization — are reshaping Malaysia’s revenue structure.
🌱 Carbon tax rollout: The long-planned framework may see further clarification, though the exact timeline remains uncertain.

📉 Fiscal balance — ensuring welfare expansion does not derail debt-reduction targets.
🏭 Industrial upgrading — directing funds to semiconductors, renewables, and value-added manufacturing.
🫱🏼‍🫲🏾 Public credibility — Anwar’s reform image depends on balancing social relief with fiscal prudence.

✅ Malaysia has been broadening its tax base and rationalizing subsidies to strengthen long-term revenues.

💬 But pressures persist:

🛢️ Petronas dividends are projected to fall from around RM 32 billion in 2025 to RM 20–25 billion in 2026, amid weaker oil prices.
💵 Economists expect no new broad-based taxes, suggesting continuity rather than major policy shocks.

💬 For ordinary Malaysians, the 2026 budget will shape everyday affordability — from fuel to basic goods.
For the government, it’s a tightrope act: protecting citizens while keeping fiscal health intact.

🔋 Reinforces Malaysia’s position in ASEAN’s clean-energy and manufacturing supply chain.
💼 Aligns with the region’s broader move toward fiscal discipline amid inflationary pressure.
📈 Seeks to attract foreign investors through predictable, reform-minded policy signals.

📅 Budget tabling date: Oct 10, 2025 (Friday, Parliament of Malaysia).
💬 Analysts (CGS International, MIDF): Expect steady reform pace, “no major tax surprises.”
🌍 Carbon tax: Still anticipated for industrial sectors, possibly phased in post-2026.
💠 Petronas dividends: RM 20–25 billion expected in 2026.
📊 Five-year plan linkage: Anchored to the 13th Malaysia Plan (2026–2030) emphasizing fiscal strength and equitable growth.
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The Straits Times Malaysia eyes more subsidies, aid to tackle living costs in 2026 budget
Reuters Malaysia eyes more subsidies, aid to tackle living costs in 2026 budget
The Star Madani Budget 2026 reflects govt's priorities, nation's direction, says Anwar

(CCL/ARS/QOB)