The Edge
10 October 2025
Bankers commend Budget 2026 for boosting growth, fiscal discipline, SME support, sustainability
KUALA LUMPUR (Oct 10): Malaysia’s bankers praise Budget 2026 for boosting economic growth, promoting fiscal discipline, supporting small businesses, encouraging regional cooperation, and advancing sustainability to strengthen the economy.
Here are the key reactions from Malaysia’s top bank executives on Budget 2026:
Novan Amirudin
Group CEO, CIMB
The budget reflects a strong commitment to strengthening the economy, raising Malaysians’ living standards while enhancing Malaysia’s attractiveness as a destination for investment and business. Recognising the pivotal role of micro and small to medium enterprises (SMEs and MSMEs) in economic growth, we welcome the focus on empowering SMEs and MSMEs through expanded financing access via Skim Jaminan Pembiayaan Perniagaan Bhd and Bank Negara Malaysia facilities.
Amid fierce global competition, we laud the government’s bold move to champion a high value economy with the introduction of Asean Business Entity to support regional expansion of Malaysian companies. We also welcome the continued focus on Johor-Singapore Special Economic Zone, a strategic gateway that enhances the country’s regional connectivity and competitiveness.
With facilitation from the Iskandar Malaysia Facilitation Centre, supported by the Johor Super Lane and Single-Family Office Incentive Scheme, this effort will continue attracting high-quality investments and talent.
The government’s commitment towards sustainability and climate transition is timely and commendable. The initial rollout of a carbon tax, aligned with the National Carbon Market Policy and National Climate Change Bill, marks an important step forward.
Ng Wei Wei
CEO, UOB Malaysia
We welcome targeted incentives for sectors such as semiconductors, advanced technology, pharmaceuticals and green innovation. These will strengthen supply chains, create high-income jobs and attract quality investments. Strategic economic corridors like the Northern Corridor, Selangor’s connectivity and infrastructure, the Johor-Singapore Special Economic Zone, and Sarawak’s renewable energy hub are key to unlocking regional growth.
Fiscal reforms and the projected narrowing of the deficit to 3.5% of GDP in 2026 reflect sound stewardship. Measures such as carbon pricing, green energy tariffs, and support for exporters through the carbon border adjustment readiness fund are positive steps towards a sustainable energy transition.
We also applaud efforts to strengthen the semiconductor ecosystem through joint ventures, co-investments by government-linked investment companies, incubator programmes and targeted financing. These initiatives will deepen Malaysia’s role in the global semiconductor value chain.
Support for SMEs remains vital, with RM50 billion allocated for financing, guarantees and programmes for digitalisation and green investment.
Datuk Seri Khairussaleh Ramli
President & group CEO of Malayan Banking Bhd (KL:MAYBANK)
Chairman of the Association of Banks in Malaysia
The budget remains committed to the well-being of the people, particularly those in marginalised segments. The banking industry upholds the government’s drive to build a high-value Asean economy through strategic investments in new economy, e.g. semiconductors, energy transition and digital industries.
The budget also addresses rakyat’s issues pertaining to costs of living — including medical inflation, where we welcomed the expansion and extension of tax reliefs for medical insurance and takaful, as well as tackling the provisions, maintenance and quality of public infrastructure, healthcare, education and housing.
We fully support the government’s direction on Cross-Border Economic Leadership, particularly on the development of the Johor-Singapore Special Economic Zone, which strengthens Johor’s position as Malaysia’s strategic gateway. As an early mover, Maybank has mobilised RM8 billion in terms of financing and investments in the Johor-Singapore Special Economic Zone and helped established two single family offices with 11 more in the pipeline.
With the largest banking network in Johor and partnerships with key Singapore business chambers, we are well positioned to facilitate cross-border investments. We look forward to supporting cross-border initiatives such as the Asean Power Grid and also the Asian Business Entity for regional mobility of our workforce.
Datuk Mohd Rashid Mohamad
Group managing director/group CEO, RHB Banking Group
Budget 2026 is a progressive and inclusive fiscal framework that reflects the government’s commitment to sustainable growth, economic resilience and social equity. The allocation of RM419.2 billion — RM338.2 billion for operational and RM81 billion for development expenditure — and a targeted fiscal deficit of 3.5% of GDP demonstrate a balanced approach to fiscal consolidation and nation-building under the 13th Malaysia Plan.
We commend the government’s continued focus on the Ekonomi Madani framework, which prioritises the well-being of the rakyat while driving long-term structural reforms. The rationalisation of subsidies, expected to save RM15.5 billion annually, and the reinvestment of these savings into targeted social programmes and infrastructure prudent financial stewardship and inclusive development.
We also welcome the government’s continued support for micro, small and medium enterprises, which are the backbone of Malaysia’s economy. Through financing guarantees, entrepreneurship incentives, digitalisation programmes, the budget enables smaller enterprises to scale and strengthen resilience. This is further reinforced by the increase in government guarantees under the Skim Jaminan Kredit Perumahan and Syarikat Jaminan Pembiayaan Perniagaan for home financing and business financing.
Jamie Ling
Group CEO, AmBank Group
Over the past three budget cycles, we have seen economic stability and policy certainty, which have benefited the economic sectors and increased investor confidence. While policy clarity has continued to build confidence, external risks remain elevated. To cushion households, we are encouraged by continued government cash handouts, namely Sumbangan Tunai Rahmah and Sumbangan Asas Rahmah, alongside targeted subsidies. These automatic stabilisers will help sustain private consumption amid a challenging external environment.
Budget 2026’s emphasis on the services sector will benefit from higher digitalisation adoption through automation tax incentive, Islamic finance expansion, and tourism prospects. Meanwhile, initiatives to support high-tech exports through the New Industrial Master Plan Industrial Development Fund, strategic investments by Khazanah Nasional Bhd and Kumpulan Wang Persaraan (Diperbadankan) in the semiconductor system, alongside targeted financing for high-value activities, will drive the industry towards achieving a RM1 trillion export potential by 2030.
Budget 2026 allocates RM81 billion for development expenditure, representing 18.8% of the RM430 billion allocation under the 13th Malaysia Plan. We take it as a phased rollout strategy that prioritises fiscal discipline while laying the foundation for high-impact projects. This also suggests a targeted approach to allow for mid-term recalibration amid a challenging external environment.
Corporate Malaysia, particularly large and SME firms, will benefit from Budget 2026’s emphasis on inclusive and green growth, as well as innovation-led development.
Tan Chor Sen
CEO, OCBC Bank (Malaysia) Bhd
The budget’s emphasis on fiscal discipline, institutional reform, and good governance, through initiatives such as the Fiscal Responsibility Act and the proposed Government Procurement Act, will strengthen investor confidence and lay the foundation for a more transparent and accountable financial ecosystem.
We welcome the government’s bold vision for cross-border economic leadership, particularly through initiatives like the Johor-Singapore Special Economic Zone, the Asean Power Grid, and the newly introduced Asean Business Entity status. These efforts not only reinforce Malaysia’s strategic role but also unlock Asean’s potential as a connected and collaborative growth region. By enhancing infrastructure, trade flows, talent mobility, and energy cooperation, Malaysia is paving the way for deeper regional integration.
We are pleased to see continued support for SMEs, including RM50 billion in financing and guarantees, and targeted programmes for women and Bumiputera entrepreneurs.
Tan Sri Tay Ah Lek
Managing director and CEO, Public Bank
Budget 2026 is well planned and will further cement the government’s Ekonomi Madani vision and its three-pronged thrust of restoring the country’s fiscal strength, enhancing the pillars of our economy and uplifting livelihoods of the rakyat. The RM419.0 billion expenditure bill is a strong statement of intent yet thoughtful in continuing to advance Malaysia’s growth impetus while ensuring no Malaysian is left behind. We applaud the government’s blueprint for 2026 and beyond.
The government’s resolve in balancing pressing issues like living costs and uplifting livelihoods with the need to empower businesses and improve basic public infrastructure is highly commendable.
Savings from successful subsidy reforms have accorded the government some measure of fiscal flexibility, part of which has been reallocated to those in need. This is positive for consumer spending and domestic demand, which could be further helped by a possible increase in minimum wages to RM1,800 by 2027. Home ownership and financing availability remains a key imperative of the government. To this end, Bank Simpanan Nasional will provide RM10 billion in low-interest loans for first-home buyers.
Efforts on sustainability continue to be prioritised. Amongst others, the government will allocate RM3 billion to the Green Technology Financing Scheme (GTFS) to encourage private investment in solar, hydrogen and bioenergy while Green Energy Tariffs will be expanded to enable corporate buyers to procure certified renewable electricity. We are fully engaged and stand alongside in building the legacy of today’s government for tomorrow’s environment.
Mak Joon Nien
CEO, Standard Chartered Malaysia
Malaysia’s Budget 2026 strikes a careful balance of today and tomorrow as the country navigates rising cost of living, trade tensions and a softer global economy while investing in the right pillars to keep the country firmly on a long-term growth trajectory.
What stands out is the government’s discipline in managing costs while keeping the rakyat in focus. Recognising the realities on the ground and the need to protect purchasing power, the Budi95 targeted fuel subsidy supports those who need it most while easing pressure on public finances. The government’s decision to maintain fiscal discipline, keeping deficit to about 3.5% of GDP in 2026, shows prudence while ensuring continued support for households and small businesses.
The RM81 billion in development spending, a slight increase from 2025, demonstrates that the government is investing in areas that will define Malaysia’s future competitiveness. The emphasis on energy transition and regional grid interconnectivity to progress towards the Asean Power Grid signals a future powered by sustainability and collaboration.
We are encouraged by the continued progress in cross-border investment zones. For the first half of 2025, the Johor-Singapore Special Economic Zone recorded approved investments of RM56 billion and is on track to meet its RM100 billion target by end-2025, building investor confidence as the region’s strategic gateway.
The government’s allocation of RM5.9 billion for Research, Development, Commercialisation and Innovation (RDCI), alongside the RM53 million Malaysia Digital Acceleration Grant to accelerate blockchain adoption, reflect a strong commitment to building a future-ready economy.
Malaysia’s move to mobilise state-owned enterprises or GLICs to help drive public spending by over RM50 billion is a brilliant move to reduce direct outlay. The country’s GLICs will raise domestic investments under the GEAR-uP initiative to RM30 billion for the energy transition, food security and digital economy industries. The additional financial firepower is on top of the government’s planned direct expenditure totalling RM419.2 billion planned for next year.
Kevin Lam
Group managing director & CEO, Hong Leong Bank
In ensuring sustainable growth amid an uncertain backdrop, the government is striking a fine balance between growth and fiscal discipline. Allocation for gross development expenditure is projected to be slightly higher at RM81 billion, representing 19% of the total budget allocation of RM419 billion for 2026, another fresh record high, with the remaining allocations channelled to operating expenditure. The fiscal deficit is expected to further narrow to RM75 billion or 3.5% of GDP next year, from RM77 billion or 3.8% of GDP in 2025, bringing us closer to the <3.0% target under the 13MP. This is certainly a move in the right direction and will be positive for Malaysia’s sovereign rating, currently at A- by S&P Global Ratings and A3 by Moody’s Investor Service, both with a stable outlook.
We commend the government’s continued two-pronged approach in uplifting revenue and rationalising expenditure, the latest via the phased introduction of Medium-Term Revenue Strategy (MTRS) and Expenditure Optimisation Measures, with the ultimate aim of broadening revenue base and strengthening fiscal sustainability. Revenue-enhancing measures for 2026 include the increase in the sales tax rate from 8% to 10%, expansion in service tax scope and improved tax compliance through e-invoicing. Meanwhile, savings from RON95 and diesel subsidy retargeting, adjustment in electricity and water tariff, as well as the removal of egg subsidies, are all expected to help with the government’s commitment to fiscal sustainability.
The GEAR-uP programme will also provide a good platform for GLCs and GLICs to drive domestic direct investment (DDI), with RM120 billion targeted over 2024-2028. The implementation of new and ongoing infrastructure projects and realisation of various approved investments will continue to underpin expansion in private investment and create more job opportunities.
Datuk Wan Razly Abdullah
President & group CEO, Affin Group
Affin Group is encouraged by the government’s commitment towards fiscal consolidation, targeting fiscal deficit to narrow steadily from 4.1% of GDP in 2024 and 3.8% of GDP in 2025 to 3.5% of GDP in 2026, with ongoing reforms in revenue enhancement and prudent expenditure management, to align fiscal strategies but ensure an adaptive approach to development projects that generate long-term economic growth.
Despite global economic uncertainties, Malaysia’s economy remains resilient, supported by strong economic fundamentals and domestic demand-driven growth. The government expects the country’s underlying real GDP growth to expand at a steady growth of between 4.0% and 4.5% in 2026, as compared to an estimated figure between 4.0%-4.8% for 2025.
The group also acknowledges the government’s emphasis and effort in areas of investment and trade to accelerate the country’s industrial framework by attracting quality investments through streamlining approval processes, further efficiency in bureaucratic processes, realigning incentives focusing on value add and technological intensity of targeted industries, which will support innovation while adapting digitalisation, leading to economic growth and productivity. This will complement existing initiatives by the government to promote trade as well as deepening Asean economic integration to position Malaysia as a regional hub for intra-regional trade and renewable energy trade within Southeast Asia.
As SMEs continue to be the backbone of Malaysia’s economy, we commend the government’s efforts to further drive the growth of micro-SMEs and SMEs through targeted loan and financing facilities. These measures are vital to fostering innovation, digital adoption and resilience among small businesses.
(Web Source: https://theedgemalaysia.com/node/773646)