KUALA LUMPUR (July 1): Malaysia will likely raise the development expenditure in the 13th Malaysia Plan (13MP) to boost domestic demand in an economy facing external headwinds, said BIMB Securities.

Gross development expenditure is likely to average RM88 billion annually over the next five years, about 10% higher than the revised 12MP allocation, according to the research house’s estimates. The spending is crucial as Malaysia’s economy may slow over 2026-2030, the house noted.

“Given the challenging external environment, we anticipate that the government will place greater emphasis on strengthening and sustaining domestic demand,” BIMB said.

The government is expected to table the 13MP in Parliament by July 31. Last week, Finance Minister II Datuk Seri Amir Hamzah Azizan took over the duties of the minister of economy, following the resignation of Datuk Seri Rafizi Ramli .

In nominal terms, gross domestic product (GDP), a key benchmark for fiscal policy framework under the 13MP, is expected to expand by 6.4% annually 2026-2030, moderating from an average growth of 8.2% recorded during the 2021-2024 period, and 7.9% in 2009-2019, according to BIMB.

For investors, however, Malaysia’s equity market could benefit “significantly” from the strategic initiatives to be announced in the 13MP, the research house added.

“In the days following the announcement, we expect positive spillovers into equity markets, particularly in construction, technology, and utilities, as investors reprice policy beneficiaries,” BIMB said.

The plan may also stimulate consumer demand, shore up ringgit stability, and amplify institutional interest from both local and foreign investors, the house noted.

The domestic push could include a proposal to raise the monthly minimum wage to RM2,000 by 2030, alongside salary adjustments for civil servants, BIMB projected. The minimum wage is currently set at RM1,700, under a law that mandates a review at least once every two years.