KUALA LUMPUR (Oct 15): Malaysia could see a larger federal budget in the year immediately after the next general election, MARC Ratings Bhd senior economist Kamal Zharif Jauhari said on Thursday.
Speaking at a joint webinar between MARC Ratings and Moody’s Ratings, Kamal said historical data showed that federal budget allocations tended to be higher in the year following a general election, citing the budgets in 2000, 2005, 2009 and 2019 as examples.
This was despite Budget 2027’s expenditure growth of 9.7%, which Kamal said exceeded the growth recorded in most previous election-year budgets.
The budget allocation growth in the previous three election years was 3% year-on-year in 2022, 7.5% in 2018, and 8.1% in 2013, according to MARC Ratings data.
The government has budgeted RM459.8 billion in expenditure under Budget 2027, up 9.7% from the RM419.2 billion originally allocated for 2026.
The government appears to have made provisions for the upcoming 16th general election (GE16) in Budget 2027, amid growing speculation that polls could be called well before the current administration's term concludes at the end of 2027.
Spending on election preparations is among the factors contributing to an 8.2% increase in the allocation for supplies and services to RM45.05 billion from RM41.63 billion for 2026, the Ministry of Finance's latest Fiscal Outlook and Federal Government Revenue Estimates report showed, though the exact sum set aside for GE16 was not specified.
The allocation is also higher compared to 2025, when the government set aside RM42.17 billion for supplies and services, partly due to higher professional services and contractual costs following the implementation of the new minimum wage policy. Spending at the time was also driven by one-off allocations for Malaysia's Asean chairmanship and tourism promotions ahead of Visit Malaysia 2026.
Apart from election preparations, the increased allocation for 2027 is to cover spending for the continuation of Visit Malaysia 2026-2027, as well as preparations for the 34th SEA Games, which is scheduled to take place in September 2027.