From Samirul Ariff Othman
Malaysia’s fiscal position is often dressed up in comforting words: consolidation, discipline, resilience. Strip away the jargon and the picture is starker.
The government is still living beyond its means — though not as recklessly as before.
Borrowing to build, not to run
In 2023, Putrajaya recorded a deficit of RM91.4 billion, financed almost entirely by RM92.8 billion of domestic borrowing.
In 2024, the pattern repeated: RM79.2 billion deficit, RM77.1 billion borrowed onshore. For 2025, the government still expects an RM80 billion shortfall.
The silver lining is that Malaysia’s revenues cover operating expenditure — salaries, pensions, subsidies. In other words, the state is not borrowing to pay its bills.
The deficits arise from development spending — roads, railways, energy projects — that cannot be funded from current revenues. This is closer to a “golden rule” of fiscal policy, but it is still deficit living.
Borrowing at home buys…