Budget 2027 is expected to boost the country's economic growth

KUCHING, Oct 10: Budget 2027 is expected to open up more opportunities for the country's economic growth through support to micro, small and medium enterprises (SMEs), homeownership and regional development, according to AFFIN Group.

AFFIN Group President and Chief Executive Officer, Datuk Wan Razly Abdullah, said he welcomed Budget 2027 which allocates total expenditure and investment amounting to RM510 billion, including RM459.8 billion for Federal management and development spending.

He also welcomed the government's efforts to reduce the fiscal deficit from 3.6 percent of Gross Domestic Product (GDP) in 2026 to 3.3 percent by 2027, while maintaining strategic investment to support long-term growth.

In an effort to address the cost of living, increasing the allocation of Mercy Cash Contributions (STR) and Mercy Asset Contributions (SARA) to RM16 billion by 2027, in addition to tax exemptions for middle-income households, is expected to help increase affordable income and domestic spending.

Meanwhile, housing financing guarantees totaling RM20 billion through the Housing Credit Guarantee Company (SJKP) are expected to benefit 80,000 first-time home buyers, thereby expanding access to homeownership financing.

For PMKS, a reduction in the income tax rate of one percentage point is expected to benefit about 300,000 businesses. The enhanced lending and financing guarantee facilities to RM57 billion by 2027 are expected to help improve financial flexibility as well as business competitiveness.

Meanwhile, AFFIN attributed the Federal allocation of RM18.7 billion to Sabah and RM16.2 billion to Sarawak in 2027 as a positive step towards stimulating regional development.

Investments in infrastructure and transport links are also expected to create new financing opportunities, including for the Sabah Pan Borneo Highway project and Sarawak-Sabah Connecting Road.

The budgetary authority also proposed introducing a block of retail stocks that could potentially expand access to investment opportunities and support the development of Islamic finance, particularly Sharia compliant financing in high-growth sectors.

The country's tourism sector is also expected to benefit from extending the Year of Visit Malaysia till 2027, allocating RM935 million for tourism and culture as well as enhancing transport connectivity through the East Coast Railway (ECRL) Project and Johor Bahru-Singapore Rapid Transit System.

Overall, AFFIN sees Budget 2027 as potentially supporting the financial well-being of households, expanding homeownership opportunities and helping businesses grow, in line with efforts to improve competitiveness and economic growth of the country. -TVS