Malaysian Rating Corporation Berhad (MARC) today hosted “MARC360 Reflections: Analyses of Malaysia’s Budget 2026 and Post-Budget Debates”. The webinar explored Malaysia’s reform momentum, fiscal resilience, and economic prospects for 2026 and beyond, featuring prominent experts from both the public and private sectors.
The session began with a presentation by Dr Ray Choy, Chief Economist at MARC Ratings Berhad, titled “Building Resilience Amid Global Risks”.
In his presentation, Dr Ray highlighted that despite ongoing geopolitical tensions and trade disruptions, Malaysia’s economy is expected to remain resilient in 2026, supported by strong macroeconomic fundamentals and sound policy implementation. Inflation is projected to remain below 2%, reflecting continued price stability.
He noted that the ringgit is expected to appreciate going into 2026, underpinned by favourable interest rate differentials and improving external conditions. MARC Ratings’ Economic Research Department was recently recognised by FocusEconomics’ Analyst Forecast Awards 2025 for its accuracy in forecasting Malaysia’s exchange rate performance.
Dr Ray further observed that Malaysia’s fiscal position has strengthened since 2021, driven by targeted subsidy rationalisation and ongoing tax reforms. Fiscal governance is set to improve further under the Public Finance and Fiscal Responsibility Act 2023 (FRA), the Government Procurement Act 2025, and the Government Service Efficiency Commitment Act 2025.
Following the presentation, a panel discussion titled “From Fiscal Priorities to National Progress” was moderated by Kamal Zharif Jauhari, Senior Economist at MARC Ratings Berhad.
The discussion featured three distinguished panellists:
- Imri Dolhadi Ab Wahab, Deputy Undersecretary, Fiscal & Economics Division, Ministry of Finance (MOF) Malaysia
- Lavanya Venkateswaran, Senior ASEAN Economist, OCBC Bank, Singapore
- Dr Ray Choy, Chief Economist, MARC Ratings Berhad
Key Highlights from the Panel Discussion:
Imri Dolhadi Ab Wahab emphasised Malaysia’s ongoing fiscal reform momentum, noting that the rollout of the FRA and the Government Procurement Act represents a major step towards strengthening transparency and accountability in public finance.
He highlighted e-Invoicing and enhancements to the Sales and Services Tax (SST) framework as key measures that support fiscal consolidation and broaden the revenue base. Imri also mentioned about the carbon tax that is targeted for introduction in 2026, an ESG-driven initiative aligned with Malaysia’s low-carbon transition.
Imri added that development spending for 2026, estimated at RM81 billion, will prioritise high-impact, productivity-enhancing projects, reflecting a balanced approach between fiscal prudence and growth support.
Lavanya Venkateswaran noted that Budget 2026 underscores the government’s commitment to fiscal discipline and reform, focusing on broadening the tax base, rationalising subsidies, and enhancing spending efficiency to create room for development expenditure.
She highlighted that Malaysia continues to stand out regionally with a credible path towards achieving its targeted fiscal deficit, supported by resilient private-sector investment and sound macroeconomic fundamentals.
Lavanya also pointed to SME-focused incentives, tourism initiatives under Visit Malaysia 2026, and regional development projects such as the Johor–Singapore Special Economic Zone (JS-SEZ) and strategic investments in Sabah and Sarawak as catalysts for inclusive and diversified growth. She added that sustaining investor confidence will hinge on policy consistency and the effective management of external risks, particularly in export-driven segments such as the semiconductor sector.
Dr Ray Choy reflected on the interplay between competitiveness, governance, and sovereign credit strength, noting that Malaysia’s strong performance in the IMD Competitiveness Index reflects its robust energy infrastructure. He emphasised that further progress in education, research and development, and institutional efficiency will enhance Malaysia’s global competitiveness.
From a ratings perspective, Dr Ray emphasised that sovereign creditworthiness is also significantly influenced by productivity, gross domestic product (GDP) per capita, and institutional reforms, apart from the emphasis on debt levels. He commended the 13th Malaysia Plan for providing a clear medium-term fiscal anchor and underlined that continued improvements in fiscal governance and institutional quality are key to maintaining market confidence.
Dr Ray concluded that Malaysia’s solid GDP growth, stable inflation, and improved governance are vital strengths as the country pursues resilience and effective policy in a challenging global environment. He also highlighted the importance of signposting the policy process, so as to include clear sequencing signals, for a wider appreciation of timeliness and policy milestones.
