Budget 2027: Affin Group says prudent budget could lift Malaysia's long-term competitiveness
Affin Group has welcomed Budget 2027, saying its focus on fiscal consolidation, cost-of-living relief and business growth could support domestic activity and strengthen Malaysia's long-term competitiveness. The banking group highlighted measures including a RM20 billion housing financing guarantee a
PETALING JAYA (Oct 9): Budget 2027's focus on fiscal consolidation, cost-of-living relief and business growth could support domestic economic activity and strengthen Malaysia's long-term competitiveness, Affin Group said.
In a statement today, Affin Group president and CEO Datuk Wan Razly Abdullah said the banking group welcomes the government's “prudent budget” with RM510 billion in total spending and investment, including RM459.8 billion in Federal operating and development expenditure. “The budget reflects the government's commitment to supporting economic growth, addressing cost-of-living pressures and maintaining fiscal discipline,” he said.
Affin noted the government's commitment to fiscal consolidation, with the fiscal deficit narrowing from 3.7% of GDP in 2025 to 3.6% in 2026, and a proposed target of 3.3% in 2027. With Malaysia's economy projected to grow between 4.2% and 5.2% in 2027, the transition towards higher-value industries, technological innovation and deeper regional integration would present opportunities to improve productivity and competitiveness, it said.
On household spending, Affin welcomed the increase in allocations for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) to RM16 billion in 2027, alongside measures to provide greater tax relief for middle-income households. It also welcomed the RM20 billion housing financing guarantee under Syarikat Jaminan Kredit Perumahan (SJKP), which is expected to benefit 80,000 first-time homebuyers.
The group highlighted the government's decision to reduce micro, small and medium enterprises' (MSMEs) income tax rates by one percentage point, expected to benefit about 300,000 businesses. The expansion of loan and financing guarantee facilities to RM57 billion in 2027, alongside RM3.5 billion allocated for trade and industry, would provide businesses with greater financial flexibility, it said.
Affin also welcomed the continued focus on Sabah and Sarawak, which will receive Federal allocations of RM18.7 billion and RM16.2 billion respectively in 2027. The bank said this aligns with its strong franchise in East Malaysia, where projects such as the Pan Borneo Highway Sabah, the Sarawak–Sabah Link Road and new gas developments are expected to generate financing opportunities across the infrastructure value chain.
On capital markets, Affin described the proposed introduction of tokenised retail savings sukuk as a positive development that could broaden investment access and reinforce Malaysia's position in Islamic finance. The extension of Visit Malaysia to 2027, along with the RM935 million allocation for tourism and culture, could also stimulate tourism and local economic activity, it said.
