Murray Hunter : Malaysia has not yet completed the second quarter of 2026, yet fiscal pressures are mounting rapidly. According to available data and reports, the federal government’s budget deficit trajectory is testing the limits of the original 2026 targets, with significant overruns driven primarily by elevated subsidy costs amid volatile global oil prices.
Read it all here.........The Numbers Behind the Concern
The 2026 Budget, tabled in late 2025, targeted a fiscal deficit of 3.5% of GDP, equivalent to approximately RM74.6 billion. This represented a modest improvement from the 2025 revised estimate of around 3.8% (roughly RM76.7 billion).
However, early 2026 developments, particularly surges in global energy prices linked to geopolitical tensions in the Middle East have pushed subsidy expenditures higher than anticipated. Reports indicate the cumulative deficit has approached or exceeded RM85 billion in the first half of the year, outpacing the full-year target well before mid-year.
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