BIMB Securities predicts a reduction in the fiscal deficit to 3.5% in Budget 2025, in line with the Half-Term Review of the 12th Malaysia Plan (RMK-12).
The report highlighted a projected decline in development expenditure (DevEx) to RM78.3 billion by 2025, compared to over RM90 billion in previous years.
While operational expenditure (OpEx) cuts, including subsidy rationalization, are expected, the timeline for the reduction of RON95 fuel subsidies remains uncertain due to inflation concerns.
BIMB also predicts no new consumption tax in the upcoming budget.
However, the potential introduction of a 5% consumption tax could generate RM16 billion and lower the fiscal deficit to 2.3%.
Additionally, Budget 2025 aims to address macroeconomic and microeconomic challenges, offer direct cash support to vulnerable groups and promote affordable housing.
The report expects a focus on the National Energy Transition Roadmap (NETR), the New Industrial Master Plan 2030 (NIMP 2030), and the continued development of large-scale projects under the Public-Private Partnership Master Plan 2030 (PIKAS 2030), ensuring significant construction activity after 2025.
