KUALA LUMPUR (July 31): The 13th Malaysia Plan (13MP) will see the government putting up a target of 4.5% to 5.5% annual gross domestic product (GDP) for the 2026 to 2030 period, according to the country's latest five-year economic development blueprint, released on Thursday.
The latest five-year GDP target compares with an average growth rate of 5.2% recorded between 2021 and 2024, which was at the lower end of the 12MP’s 5%-6% target range.
The government has also projected RM430 billion for the federal government's development expenditure (devex) or an average of RM86 billion a year in the five-year period, the report showed. Federal government fiscal deficit is aimed to hit under 3% of GDP by 2030, from 4.1% in 2024.
Economists polled by The Edge project that GDP will expand by 4%-5.5% annually in the next five years, reflecting a more moderate outlook amid global uncertainties.
The devex target is also within The Edge's poll of RM400 billion-RM450 billion. Allocation for the 12MP (2021-2025) was RM415 billion, raised from the initial RM400 billion during the 2023 mid-term review, a sharp increase from RM248.5 billion under the 11MP (2016-2020).
"This plan is not merely rhetoric; rather, the government has set measurable targets for success in terms of economic figures to guide and monitor the work that will be carried out," Prime Minister Datuk Seri Anwar Ibrahim said when tabling the 13MP in Parliament.
Overall, Anwar said the government needs RM611 billion in total to materialise the 13MP.
Aside from the RM430 billion devex, he also accounted for RM120 billion investment pledged by government-linked companies previously announced under the Gear-Up programme, and another RM61 billion from the public-private partnership and private funding initiative partnership.
Of the RM430 billion devex, RM227 billion is earmarked for the economic sector, including infrastructure, infostructure, public transport, flood mitigation, affordable housing and capacity-building projects.
Another RM133 billion will go to the social sector, which includes education (RM67 billion) and healthcare (RM40 billion). From the balance, RM51 billion is allocated to national security, while the remaining RM17 billion is for public administration and governance improvements.
The 13MP also projected 6% annual growth in private investment (RM417.9 billion a year on average) and 3.6% public investment (RM112.9 billion a year on average). Meanwhile, gross exports are expected to rise by 5.8% annually over the planned period.
Inflation is expected to remain 2%-3% per annum, broadly in line with the 2.5% average seen from 2021-2024.
Economic restructuring continues
The five-year plan sees the government continue highlighting its ongoing focus of improving living standards, restructuring the economy, and enhancing Malaysia’s competitiveness as a leading Southeast Asian economy.
Other sectoral priorities targets under the 13MP include:
- Ensuring 70.1% of graduates are employed in jobs matching their qualifications by 2030, with scores on par with international averages
- Reducing out-of-pocket spending to 32% of total health expenditure, with 60% of citizens having digital health records by 2030
- Raising compensation of employees — comprising both salary and non-monetary remuneration — to 40% of GDP, up from just over one-third of the economy currently. Average monthly household income is targeted to reach RM12,000, with the absolute poverty rate reduced to 4.7% by 2030, and
- Building 500,000 more affordable housing units by 2030.
Overall, the 13MP is anchored on three main pillars: building an AI-driven economy, developing a human-centred social system under the Madani framework, and fostering a sovereign and dignified nation. It is supported by over 120 strategies and more than 600 initiatives.
"We are forced to believe — to act boldly and cautiously, to deal with past [government] mistakes without compromising the interests of the majority of the people," Anwar said.
"From the outset, we are firmly committed to implementing fiscal reforms in phases by increasing revenue and optimising expenditure, such as re-targeting subsidies, which will ultimately reduce new debt in the state budget," he added.
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