KUALA LUMPUR: The 2025 Budget is expected to set a solid foundation to achieve growth at 4.5 per cent to 5.5 per cent, providing a strong foundation for the upcoming 13th Malaysia Plan (13MP).
Malaysian Rating Corporation Bhd (MARC) group chief executive officer Arshad Mohamed Ismail said the current year has been strong in terms of economic growth, surpassing initial expectations, with the government projecting 2024 growth of between 4.8 per cent and 5.3 per cent.
He added that the target of a 3.8 per cent fiscal deficit in 2025, signalling a potential improvement from 4.3 per cent in 2024, paves the way for reinforcing the government's financial strength, aligning with the goals outlined in the Medium-Term Framework.
"The introduction of revenue-enhancing measures in 2025, including the global minimum tax and dividend tax, coupled with the rationalisation of RON95 fuel subsidies by mid-2025, are expected to sustain the ongoing reform agenda and signal a stronger commitment to fiscal consolidation moving forward." "With effective policy sequencing in place, the government can balance competing priorities while advancing necessary reforms," he said in a statement.
Meanwhile, Arshad also said the policies and initiatives outlined in the 2025 Budget will strengthen Malaysia's competitive edge and reinforce its position as an economic leader in the region.
He noted that this budget demonstrates the nation's readiness to navigate future challenges, as Malaysia prepares to assume the Asean chairmanship in 2025.
Arshad also commended the measures that have been introduced to ensure the benefits of this growth are directly felt by the people, promoting a more inclusive and equitable future for all.
"The government's policy consistency is evident in the continued priority placed on high-growth high-value (HGHV) sectors, aligning with national masterplans." "By continuing to improve the ecosystem of these sectors while attracting both direct and foreign investment through new tax incentives and matching funds with state-specific strategies — Malaysia is well-positioned for further economic expansion. "Supported by political stability, these masterplans are on track to create higher-skilled jobs and propel Malaysia towards becoming a high-income nation," he said.
Arshad also said MARC welcomes the initiatives outlined to further solidify Malaysia's position among global leaders in the capital market, particularly in Islamic finance.
He noted that the allocation of RM100 million in matching funds to spur innovation in Islamic financial products, focusing on climate finance and food security, is a testament to the intersection of environmental, social and governance (ESG) principles with Islamic finance. "The forward-looking policies introduced to advance Islamic finance will play a crucial role in driving sustainable economic expansion and attracting global investments," he said.