Budget 2026 Malaysia – Key Announcements & Highlights

Budget 2026, the fourth in the MADANI Budget series, is expected to shape Malaysia’s economic direction for the coming year with a focus on targeted subsidies, SME growth, digitalization, and community development. This year’s Budget aims to balance fiscal discipline with social support, ensuring that assistance reaches those who need it most while helping businesses, especially SMEs and MSMEs, strengthen competitiveness, adopt technology, and drive long-term national growth.

Set to be tabled on 10 October 2025, Budget 2026 will outline how the government plans to sustain economic recovery, empower entrepreneurs, and create inclusive opportunities for Malaysians across all sectors.

Quick Summary of Malaysia’s Budget 2026

• Budget 2026 will be announced on Friday, 10 October 2025, at 3:00 PM, marking the fourth MADANI Budget focused on fiscal stability and inclusive growth.

• Main priorities include targeted subsidies, human capital development, infrastructure for Sabah, Sarawak, and rural areas, and continued Rahmah Cash Aid (STR) support.

• Malaysia’s economy grew 4.4% in Q1 2025, with low inflation (1.1%) and unemployment (3.0%), and a fiscal deficit expected to narrow to 3.8% of GDP.

• Budget 2026 is expected to boost SME digitalisation, green investments, and financing access for small businesses, women, and youth entrepreneurs.

When Will Budget 2026 Be Announced?

Budget 2026, also known as the Fourth MADANI Budget, will be presented on Friday, 10 October 2025, at 3:00 PM.

The announcement will be broadcast live across national media and can also be watched online at the official portal: MOF

You can also tune in to live coverage on local TV channels such as RTM, TV3, and Astro Awani.

Live Streaming Links:

Summary of the Pre-Budget 2026 Statement

The 2026 Budget will continue to uphold the principles of the Ekonomi MADANI framework, built on three main pillars:

1. Raising the Nation’s Growth Ceiling

• Generating multiplier effects across economic value chains
• Acting as a strategic driver for Malaysia’s industrial transformation
• Realigning incentives to enhance investment attractiveness

2. Lifting the People’s Living Standards

• Labour market reforms to create quality employment opportunities
• Strengthening socio-economic assistance mechanisms for a dignified livelihood
• Moving towards an equitable and sustainable healthcare system
• Reforming the education sector to build an inclusive, future-ready economy
• Bridging the urban–rural development gap
• Empowering all groups to participate in an expanding economy

3. Driving Reform and Good Governance

• Strengthening integrity and fiscal governance
• Modernizing public finance through technology
• Enhancing GovTech and public service delivery
• Reforming the civil service for a future-ready government

Official Pre-Budget Statement 2026 (PDF)

Main Focus Areas of Budget 2026

• Targeted Subsidies
  Transitioning from broad-based subsidies to more targeted assistance to reduce wastage and ensure support reaches those who need it most.
• Human Capital and Public Sector Development
  Initiatives such as APEL learning programs by INTAN and GlobalNxt University aim to modernize the public sector and close skill gaps among civil servants.
• Infrastructure and Community Development
  Emphasis on rural development, especially in Sabah and Sarawak, as well as tourism, SMEs, and inclusive support for groups such as senior citizens, OKU, Orang Asli, Bumiputera, women, and youth.
• Rahmah Cash Aid and Direct Support for the People
  Continuation of the Sumbangan Tunai Rahmah (STR) programme and other targeted assistance to ease the cost of living for low and middle income households. The initiative ensures direct cash transfers reach eligible groups efficiently, providing immediate financial relief and supporting domestic spending within local communities

Malaysia’s Economic Overview 2025

• GDP Growth: The economy grew 4.4% year-on-year in Q1 2025, driven mainly by private consumption and investment, in line with Bank Negara Malaysia’s forecast of 4.0% to 4.8% growth for the year (Bank Negara, Reuters Economic Report).
• Inflation: Headline inflation remained low at around 1.1% in June 2025, keeping Malaysia among the countries with the lowest inflation rates in ASEAN (Trading Economics).
• Employment: The unemployment rate dropped to 3.0% in May 2025, maintaining near full employment levels for several consecutive months (Trading Economics).
• Fiscal Deficit: The government expects the fiscal deficit to narrow to 3.8% of GDP in 2025, consistent with its medium-term fiscal consolidation target under the MADANI framework (MOF).

Summary of Budget 2025 Highlights for SMEs

Loans and Financing for MSMEs
RM40 billion was allocated for MSME loans through government agencies, including RM3.2 billion in microfinancing from TEKUN and BSN. This supports small traders, OKU communities, and Bumiputera entrepreneurs.

Impact: Easier access to capital helps small businesses invest in automation and digital tools.

Financing Guarantees by SJPP
SJPP provided RM20 billion in financing guarantees, with RM5 billion earmarked for Bumiputera SMEs.

Impact: Makes it easier for SMEs to secure funding despite limited collateral.

BNM Loan Funds for SMEs
Bank Negara Malaysia allocated RM3.8 billion to help SMEs adopt automation, digitalization, and sustainable practices.

Impact: Supports efficiency, cost savings, and long-term growth.

Digitalization Matching Grants
RM50 million was provided through BSN to help MSMEs accelerate digital adoption.

Impact: Encourages small businesses to automate operations and improve productivity.

Upgrading Facilities for Small Traders
RM100 million was set aside to upgrade hawker stalls and public markets nationwide, including in Sabah and Sarawak under the Tamu Desa initiative.

Impact: Provides better trading environments and supports income growth.

Support for Women and Youth Entrepreneurs
RM650 million was allocated to help women and youth start or expand their businesses.

Impact: Promotes inclusivity and encourages entrepreneurship among key demographic groups.

Insurance and Takaful for Micro-Entrepreneurs
RM5 million was allocated for insurance and takaful coverage for micro-entrepreneurs and delivery riders.

Impact: Offers financial protection for small businesses facing unforeseen risks.

Support for Bumiputera Entrepreneurs
RM1.3 billion was allocated to strengthen Bumiputera contractors, while RM800 million went to MARA and PUNB.

Impact: Expands Bumiputera participation in national development projects.

Funding for Startups
RM1 billion was provided under the National Fund-of-Funds, including RM65 million from Cradle Fund, to support high-potential startups.

Impact: Improves access to capital and fosters innovation.

Creative and Social Entrepreneurs
RM30 million was channeled through the MADANI Creative Youth Programme to train creative entrepreneurs in digital media and short film production.

Impact: Strengthens Malaysia’s creative industry and supports youth-led ventures.

Export Market Support
RM1 billion was allocated for the Mid-Tier Companies Programme, plus RM750 million via EXIM Bank and RM40 million to MATRADE for export promotion.

Impact: Helps Malaysian SMEs expand globally with financial and marketing support.

What to Expect in Budget 2026

Economists expect Budget 2026 to:

• Continue targeted subsidy reforms and fiscal consolidation
• Focus on digitalization, automation, and sustainability for SMEs
• Strengthen access to financing for micro, women-led, and youth-led businesses
• Introduce tax incentives for companies investing in green and ESG technologies
• Expand digitalization grant programmes under the MADANI agenda

Sources:

1. Bank Negara Malaysia (BNM) – Quarterly Bulletin Q1 2025
   https://www.bnm.gov.my/-/qb25q1_en_pr
2. Reuters – Malaysia growth near forecast; central bank flags tariff risks (August 2025)
   https://www.reuters.com/world/asia-pacific/malaysia-growth-near-forecast-second-quarter-central-bank-flags-tariff-2025-08-15
3. Trading Economics – Malaysia Inflation Rate (June 2025)
   https://tradingeconomics.com/malaysia/inflation-cpi
4. Trading Economics – Malaysia Unemployment Rate (May–June 2025)
   https://tradingeconomics.com/malaysia/unemployment-rate
5. Ministry of Finance Malaysia (MOF) – Fiscal Policy Committee Statement (2025)
   https://www.mof.gov.my/portal/en/news/press-release/fiscal-policy-committee-2025
6. Official Malaysian Budget Portal (MOF) – Budget 2026 Announcement and Live Stream
   https://belanjawan.mof.gov.my
7. RTM Klik – Live Budget Coverage
   https://rtmklik.rtm.gov.my/
8. BERNAMA Official Facebook Live
   https://www.facebook.com/bernamaofficial
9. Astro Awani – Live Video Stream
   https://www.astroawani.com/video-terkini
10. MOF Malaysia – Pre-Budget 2026 Statement (PDF)
    https://mof.gov.my/portal/pdf/Kenyataan-Pra-Belanjawan-2026.pdf