With Belanjawan 2025 Malaysia (Bajet 2025) slated for presentation on October 18, 2024, the Malaysian government is actively addressing key concerns surrounding the rising cost of living in Malaysia and accelerating economic reforms.
The recently released Pre-Budget Statement (PBS) by the Ministry of Finance offers a glimpse into the government’s priorities, emphasizing inclusivity, public engagement, and a long-term commitment to building a resilient economy under the Ekonomi MADANI framework.
With the upcoming Belanjawan 2025 Malaysia (Bajet 2025) set to be presented on October 18, 2024, expectations are high regarding how the government will address pressing economic and social issues. Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim has emphasized that this budget will focus heavily on managing the rising cost of living in Malaysia, a major concern for many Malaysians.
Pre-Budget Statement Sept 2025 Update: UOB Calls for Expansionary Measures Amid Fiscal Deficit Reduction Efforts
UOB Global Economics & Markets Research predicts that Budget 2025 Malaysia (Bajet 2025) will remain expansionary to address economic growth and the elevated cost of living despite efforts to reduce the fiscal deficit to 3.8% of GDP in 2025 from 4.3% in 2024. Government expenditure is projected to rise by 1.7% to RM404.8 billion, driven by increased operating expenditure (opex) for civil servant pay hikes, pension adjustments, and grants for Sabah and Sarawak. Despite this, development expenditure will decrease to RM80 billion.
Key growth drivers for 2025 include robust investments, private consumption, and external sector recovery. UOB also anticipates further subsidy rationalization, targeting diesel and food subsidies, to manage rising opex. The government may introduce new tax measures, such as a high-value goods tax and global minimum tax, to broaden its revenue base amid lower petroleum revenue. Inflation is forecasted at 2.5% to 3.5%.
The government is expected to balance tax policies to maintain positive investor sentiment and economic momentum.
Economic Reforms and Digital Initiatives in Belanjawan 2025 (Bajet 2025)
In line with Malaysia’s Ekonomi Madani vision, Belanjawan 2025 Malaysia (Bajet 2025) will continue implementing economic reforms that focus on enhancing national competitiveness and fostering innovation.
One of the key priorities is to strengthen the digital economy, providing incentives for small and medium enterprises (SMEs) to adopt advanced technologies. These measures aim to enhance productivity, boost job creation, and foster sustainable growth.
The government, through the Ministry of Digital, is particularly focused on developing digital talent and ensuring the workforce is prepared for the demands of the future economy. This will include support for micro, small, and medium enterprises (MSMEs) as they transition to digital platforms, benefiting from both tax incentives and other forms of government assistance.
Continuous Reforms for a Modern Economy in Belanjawan 2024 Malaysia
An important theme of Belanjawan 2025 Malaysia (Bajet 2025) is continuous economic reform. The government is committed to enhancing governance, reducing public sector inefficiencies, and ensuring that policies align with long-term sustainability goals.
These reforms are part of Malaysia’s broader efforts to establish a more competitive and resilient economy, better equipped to handle global challenges while improving the quality of life for all citizens.
One of the standout features of the budget will be its commitment to inclusivity. The government has conducted a series of engagement sessions with stakeholders across various sectors to gather input and ensure that the budget reflects the needs of the people. From public services to private investments, the objective is to create a balanced and forward-looking economic environment.
Managing the Cost of Living in Malaysia: A Central Theme
The rising cost of living in Malaysia remains a central issue that Belanjawan 2025 Malaysia (Bajet 2025) aims to address. Items like sugar, oil, flour, and fuel may still be relatively affordable compared to neighboring countries such as Thailand and Indonesia, but Malaysians continue to feel the pinch due to inflation and stagnant wages.
The Prime Minister acknowledged this during a recent assembly at the Ministry of Finance, stating that while the prices of basic goods may be low by regional standards, Malaysians still face considerable financial strain.
To combat this, the government is expected to introduce measures aimed at tackling the root causes of price increases, including cartels, monopolies, and issues related to supply chains for essential items like fertilizers and seeds. By addressing these structural issues, the government hopes to alleviate some of the pressure on everyday consumers.
What is Ekonomi MADANI: A Framework for Inclusive Growth
At the heart of Malaysia’s economic transformation is the Ekonomi MADANI framework, introduced by Prime Minister Anwar Ibrahim. The framework seeks to promote a more equitable, just, and sustainable economy, addressing the widening gap between the rich and poor.
It aims to transition Malaysia away from the “middle-income trap” and into a high-income nation by emphasizing inclusivity, sustainability, and social well-being.
Key Pillars of Ekonomi MADANI
- Inclusivity and Equality
Ekonomi MADANI emphasizes reducing income inequality and ensuring that economic growth benefits all Malaysians, regardless of race, religion, or geographic location. It seeks to build a more equitable society by ensuring that wealth is distributed more fairly and that opportunities are accessible to all. - Sustainability
The framework prioritizes sustainable development, with a focus on environmental conservation and transitioning to a green economy. The National Energy Transition Roadmap and the New Industrial Master Plan 2030 are key initiatives that align with this goal, promoting investment in green technology and renewable energy. - Economic Security and Resilience
By fostering greater economic complexity and innovation, Ekonomi MADANI aims to safeguard Malaysia’s economic future. It promotes digital transformation, particularly among SMEs, and encourages technological advancement to make Malaysia more competitive on the global stage. - Strengthening Governance and Public Services
A core aspect of the framework is enhancing governance and public service delivery. This involves improving fiscal management, reducing inefficiencies, and ensuring that public resources are used effectively to benefit the people. By strengthening governance, Ekonomi MADANI aims to restore trust in public institutions and create a more transparent government.
Economic Reforms Under Ekonomi MADANI
The PBS signals a significant push toward economic reforms that align with the Ekonomi MADANI vision. These reforms focus on enhancing Malaysia’s competitiveness by restructuring the economy toward high-value-added activities. For instance, the government aims to foster private sector-led growth by providing incentives for digital transformation, particularly for small and medium enterprises (SMEs).
The PBS sets three short-term priorities for Belanjawan 2025:
- Raising the Ceiling: Restructuring the economy to enhance competitiveness and promote higher value-added activities.
- Raising the Floor: Improving the quality of life for Malaysians and creating more inclusive opportunities for economic participation.
- Strengthening Governance and Public Service Delivery: Ensuring greater transparency, accountability, and efficiency in the public sector.
Public Consultation and Engagement
An essential component of Belanjawan 2025 Malaysia is the extensive public consultation process. The PBS emphasizes the importance of fostering open dialogue between the government, businesses, and the general public. This is part of a broader commitment to transparency and inclusivity in the budget formulation process, as outlined in the Ekonomi MADANI vision. The Ministry of Finance has invited citizens and stakeholders to submit their proposals and feedback via the Belanjawan 2025 portal, ensuring that the voices of Malaysians are heard.
The national budget consultation process began on July 9, 2024, with participation from over 400 representatives across various sectors, including government agencies, the private sector, academia, non-governmental organizations (NGOs), and civil society organizations (CSOs). These consultations will continue over the coming weeks, allowing for a more collaborative approach to budget planning.
Expected Impacts of Belanjawan 2025 Malaysia (Bajet 2025)
- Relief for Households
The government’s focus on managing the cost of living in Malaysia could result in reduced prices for essential goods, increased subsidies, and stricter regulations to curb monopolistic practices. These measures are aimed at providing direct relief to households, particularly those most affected by inflation. - Boost for the Private Sector and Digital Economy
The emphasis on digital transformation and incentives for SMEs is expected to accelerate technological adoption, driving productivity and growth in key industries. The government’s focus on developing digital talent and supporting micro, small, and medium enterprises (MSMEs) will create new opportunities for businesses and workers alike. - Enhanced Governance and Public Services
The continuous push for fiscal reforms and improved public service delivery will likely lead to more efficient governance, better utilization of public resources, and improved access to essential services. This will also enhance Malaysia’s global competitiveness and investment appeal. - Greater Inclusivity
By prioritizing inclusivity and equality, Belanjawan 2025 aims to ensure that all Malaysians have access to economic opportunities and public services. This could lead to more equitable outcomes, reducing the wealth gap and promoting social harmony. - Public Participation in Budget Formulation
The inclusive nature of Belanjawan 2025 means that citizens, businesses, and organizations have a greater say in the budget process. This could lead to more tailored and effective policies that address the specific needs of different sectors of society.
Final Thoughts
As Malaysia prepares for the official presentation of Belanjawan 2025, the government’s commitment to tackling the rising cost of living in Malaysia, driving economic reform, and promoting public consultation stands out as key elements. The Pre-Budget Statement provides a framework for the nation’s fiscal priorities, emphasizing growth, inclusivity, and governance under the Ekonomi MADANI principles. By fostering an open dialogue with the public and ensuring that budget decisions reflect the needs of all Malaysians, Belanjawan 2025 aims to build a prosperous and resilient future for the nation.
How YYC taxPOD Can Support You Through Belanjawan 2025 (Bajet 2025) and Economic Reforms
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Benefits for SMEs
- Cost-Effective Training: With new reforms and policies introduced under Belanjawan 2025, SMEs may struggle to keep up without dedicated tax professionals. YYC taxPOD offers affordable, accessible tax education, ensuring that smaller businesses can stay compliant while managing their budgets effectively..
- Up-to-Date Knowledge: The economic reforms in Belanjawan 2025 will likely impact tax regulations, including digital transformations for businesses. YYC taxPOD provides regular live updates and webinars that keep SMEs informed of the latest tax laws and compliance requirements.
- Convenient Learning: With flexible access to masterclass videos, bite-sized learning, and live sessions, YYC taxPOD allows business owners and finance teams to stay on top of reforms at their own pace—essential for managing multiple responsibilities in a fast-changing economy.
Benefits for MNCs
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Sources
BERNAMA
- Source for information on economic reforms and digital initiatives related to Belanjawan 2025 and Ekonomi MADANI (BERNAMA, Laman Khas Belanjawan 2025, BusinessToday).
Kosmo Digital
- Source for discussions on the government’s commitment to continuous reforms, improving governance, and managing the cost of living (News | The Malaysian Insight, Kosmo Digital).
The Malaysian Insight
- Source for insights on the rising cost of living and the government’s plans to address these issues (News | The Malaysian Insight).
Malaysia MADANI
- Source for definitions and objectives of Ekonomi MADANI and its focus on inclusivity and equality (Malaysia MADANI).
The Star
- Source for detailed explanations of Ekonomi MADANI’s pillars, such as sustainability and economic resilience (The Star).
BusinessToday
- Source for discussions on the Pre-Budget Statement (PBS) and public consultation for Belanjawan 2025 (BusinessToday, Laman Khas Belanjawan 2025).
