The government is enforcing new fiscal rules to improve transparency, control debt, and maintain social spending, backed by strong economic growth and investment.
KUALA LUMPUR: The government will ensure the objectives of the Public Finance and Fiscal Responsibility Act 2023 translate into better fiscal outcomes.
This will be achieved by strengthening a rules-based governance framework to improve transparency and accountability, said the Ministry of Finance.
The Act sets clear fiscal targets, including deficit limits and debt management guidelines.
These guide annual Budget planning and development plans to ensure spending discipline without compromising support for low-income groups.
The government remains committed to annual development expenditure exceeding 3% of GDP. It prioritises high-impact spending on social protection, healthcare, education, and workforce skills development.
Fiscal transparency is being strengthened through comprehensive reporting requirements. Key documents like the Economic Outlook and Fiscal Outlook reports are published openly for public scrutiny.
“These documents are published openly to enable the public, Members of Parliament, economic analysts, and investors to assess the government’s Budget allocations and fiscal policies,” the ministry stated.
The written reply was in response to a question from Tan Sri Muhyiddin Yassin. He had asked about measures to ensure the Act’s objectives lead to better outcomes and greater transparency.
Monitoring is institutionalised through the Fiscal Policy Committee. A fiscal adjustment plan must be tabled in Parliament if deviations from targets occur, ensuring transparent and gradual adjustments.
Stronger fiscal governance is supported by solid economic performance. GDP expanded by 6.3% in Q4 2025, bringing overall 2025 growth to 5.2%, exceeding initial forecasts.
Approved foreign direct investment totalled RM285.2 billion from January to September 2025. The ringgit also strengthened by 10.1% against the US dollar in 2025.
Overall, the implementation of Act 850 ensures more disciplined and transparent public financial management. It maintains a focus on public well-being, economic resilience, and long-term fiscal sustainability.
