KUALA LUMPUR Oct 23 – Malaysia’s Budget 2025, tabled by Prime Minister Datuk Seri Anwar Ibrahim on October 18, showcases the government's dual focus on fiscal consolidation and boosting economic growth, according to Shan Saeed, Chief Economist at Juwai IQI, in an interview with DagangNews.com.
He said the budget sets ambitious targets for debt reduction, economic expansion, and income growth, while addressing key sectors to ensure sustainable development.
The recently unveiled Budget 2025 emphasizes the government's commitment to strengthening Malaysia's fiscal health and raising the income levels of its citizens.
Shan, in his interview, highlighted several strategic measures outlined in the budget aimed at supporting businesses, stimulating aggregate demand, and promoting long-term economic resilience.
He noted that the government projects an economic growth rate of 4.5% to 5.5% in 2025, driven by robust investment and consumption.
"The focus on infrastructure investments, with an allocation of RM120 billion, is a clear indication of the government's intent to strengthen regional development," he said.
He further explained that infrastructure spending would significantly contribute to GDP growth, providing a solid foundation for Malaysia's economic trajectory.
A key aspect of the budget is fiscal consolidation, with the government aiming to bring the fiscal deficit down to 3.8% in 2025.
Shan praised the administration’s commitment to reducing debt levels, emphasizing that these measures are essential for maintaining investor confidence and ensuring economic stability.
In a bid to reform subsidies, the government plans to restructure the RON95 petrol subsidy by mid-2025, with potential annual savings of RM8 billion.
According to Shan, this restructuring aligns with the broader goal of improving fiscal sustainability without compromising the living standards of lower-income groups.
Further, the budget introduces a more progressive Sales and Services Tax (SST) targeting non-essential imported goods, which Shan believes will support the government in broadening its revenue base and reducing the fiscal deficit.
Another noteworthy measure is the new 2% tax on dividends exceeding RM100,000, aimed at shifting the tax burden towards wealthier shareholders and expanding the overall tax base.
"In essence, the government is looking to bolster its fiscal position while encouraging growth to enhance the standard of living across the board," Shan remarked.
He expressed optimism about Malaysia’s economic outlook for 2025, noting that investors remain positive about the country’s ability to maintain its upward trajectory.
The Budget 2025 reflects a strategic balance between promoting economic growth and ensuring fiscal prudence, positioning Malaysia for a more resilient future in the global economy. - DagangNews.com
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