PETALING JAYA: The 13th Malaysia Plan (13MP) is ambitious and its goals can only be delivered with strong execution and clear funding plans, analysts say.
Berjaya Mutual Bhd chief investment officer Datuk Dr Nazri Khan said the government’s 4.5–5.5% gross domestic product (GDP) growth target is challenging but not impossible to achieve.
“Given the current situation, it’s very challenging to hit 5.5%. But it is achievable – just more challenging,” he told SunBiz.
He welcomed the focus on high-value, high-growth sectors such as artificial intelligence (AI), describing the move as a good way to break out of the middle-income trap.
“Targeting a fiscal deficit below 3% of GDP and keeping government debt under 60% – that’s excellent. It will strengthen governance and fiscal reforms,” Nazri said.
He added that regional development in Sabah and Sarawak, targeted subsidies such as the Rahmah Cash Aid and structural transformation efforts are all positive steps.
However, execution remains the main hurdle.
“Bureaucracy is the problem. The ability to coordinate – that’s a key challenge,” Nazri said, adding that investments in digitalisation and rural internet infrastructure will require a whole-of-government approach and strong monitoring.
“We always want to cut debt, but our execution and oversight have been weak,” he said, warning that the global environment adds to the difficulty.
Nazri also flagged concerns about heavy reliance on domestic demand amid a disrupted labour market, global commodity shocks and geopolitical tensions.
He said the 13MP’s privatisation mechanisms are not clearly explained and hoped Malaysia Madani will not become purely rhetorical.
“The RM430 billion development budget is great, but it’s unclear how it will be funded. There are still many subsidies, so how exactly will the deficit be reduced?”
He also stressed the need for more job creation to prevent the rakyat from being left behind and called for stricter project management, especially for infrastructure efforts in poorer regions.
BIMB Securities chief economist Imran Nurginias Ibrahim described the 13MP as a forward-looking roadmap centred on digitalisation, inclusivity and economic competitiveness.
He said the targeted 4.5–5.5% GDP growth is consistent with Malaysia’s potential and supports both recovery and reform, adding that “RM430 billion in development spending and the aim to bring the fiscal deficit below 3% by 2030 show a strong intent to balance growth with sustainability”.
Imran Nurginias welcomed the focus on digital transformation, AI and data infrastructure, along with social equity and education-employment alignment under the Madani Framework.
However, he cautioned that targets such as tripling household income or increasing wage share of GDP are ambitious and would require productivity reforms and private sector buy-in. “The absence of concrete tax reform measures creates uncertainty over how these plans will be sustainably funded.”
Imran Nurginias warned of diluted focus, noting the 600 initiatives and 120 strategies listed, and urged the government to establish clear priorities and delivery mechanisms.
“Critical issues such as ageing population policy, long-term healthcare and institutional governance remain underdeveloped,” he said.
Ultimately, he added, the 13MP’s success hinges not on the number of strategies outlined but on bold, disciplined implementation supported by strong interagency coordination.
Independent analyst Jason Loh commended the Madani government’s strategic use of deficit spending to drive growth, noting that only RM61 billion or less than 10% of the RM611 billion allocation comes from the private sector, mostly through public-private partnerships.
“This reinforces the need for the government to rely on its own fiscal power to engineer economic growth,” he said.
Loh said private sector dependency on public spending helps offset rising costs from tax expansions, tariff hikes and subsidy rationalisation, especially for SMEs.
Loh added that high private and household debt – now at 84.3% of GDP – could limit consumption, and further strain the economy if Bank Negara Malaysia raises the Overnight Policy Rate (OPR) to manage debt levels.
Given these conditions, he said, there should be no rush to reduce the fiscal deficit to 3% of GDP, noting that the current 4.8% target can be deferred if necessary.
The recent OPR cut to 2.75% may help ease the government’s debt servicing burden, and Malaysia’s bond market remains relatively stable due to the Employees Provident Fund’s role as a statutory purchaser, he said.
Loh praised the government’s balance between public and private spending, especially its prioritisation of education and technical and vocational education and training (TVET), which is allocated RM133 billion under the plan.
“Deficit spending should build the economy’s productive capacity – human capital included. TVET is crucial to unlocking potential idle capacity over the long term,” he said.
Loh also called for political culture reform to complement institutional changes.
“Political culture is the software, and institutional reform is the hardware. Without both, changes won’t stick,” he said.
Loh said Malaysia must avoid the “First World infrastructure, Third World mentality” trap and emulate Singapore’s model of high standards in both execution and mindset.
He added that the 13MP should have included green bonds to modernise fiscal policy and support sustainable growth.
To that end, Loh proposed a Green Investment Bank under Bank Negara Malaysia to issue and trade green bonds, supporting a debt-driven sustainability market alongside Bursa Malaysia’s Voluntary Carbon Market.
