KUALA LUMPUR: Public sector entities will remain as a catalyst for sustained and inclusive economic growth, anchored by the 13th Malaysia Plan 2026-2030.
The consolidated public sector (CPS) position encompasses the combined fiscal activities of the federal government, state governments, federal statutory bodies and non-financial public corporations (NFPCs).
The Ministry of Finance (MoF) said that despite anticipated higher revenue in 2025, the CPS is estimated to record a lower current surplus of RM29.1 billion due to a narrower surplus reported by NFPCs.
“The consolidated development expenditure (DE) is expected to decline by 2.7% to RM180.2 billion, reflecting lower capital expenditure in tandem with the final year of the 12th Malaysia Plan, 2021-2025 (12MP).
“The CPS is expected to record a larger overall deficit of RM151.1 billion in 2025 or 7.5% of gross domestic product (GDP), after netting off intra-transactions between public sector units,” the MoF said in its Fiscal Outlook and Federal Government Revenue Estimates 2026 report released today.
The ministry said the consolidated general government revenue is estimated to increase to RM402.5 billion in 2025, attributed to improved tax collection by the Federal Government, particularly due to the revision of sales tax and service tax.
“The consolidated operating expenditure (OE) is projected to rise by 3.4% to RM385.2 billion, owing to higher allocation for emoluments.
Hence, the general government current surplus is estimated to narrow to RM17.2 billion,” it said.
However, the MoF said that the consolidated DE is forecast to decline by 4.0% to RM85.5 billion, mainly attributable to near completion of key programmes and projects under the 12MP.
“The consolidated general government overall deficit is expected to reach RM68.2 billion or 3.4% of GDP in 2025, after netting off intra-transfers and net lending,” it said.
The MoF said that the consolidated financial position of state governments is projected to remain resilient in 2025, albeit with a lower total revenue estimated at RM38.4 billion.
“This decline is mainly attributed to a moderation of 7.1% in state-generated revenue, which is expected to register RM29.5 billion in 2025,” it said.
The MoF also said that the consolidated financial position of NFPCs is anticipated to moderate further in 2025, reflecting a more subdued operating environment due to prevailing uncertainties, with aggregate revenue decreasing to RM446.5 billion or 22.2% of GDP.
“The reduction in revenue has outpaced the decline in expenditure and is expected to result in a lower current surplus of approximately RM14.6 billion,” it added. – Bernama
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