Rafizi warns next government will face deepening fiscal crisis

Former economy minister Rafizi Ramli has warned that Malaysia’s growing fiscal pressures will pose serious challenges for any government that takes power in the next two years. Speaking during the Budget 2026 debate, the Pandan MP said despite an additional RM15.5 billion in revenue this year, the government has failed to narrow its fiscal gap, signalling deeper structural problems in national finances.

Rafizi said ballooning debt guarantees for state-linked projects — including RM85 billion for DanaInfra, RM50 billion for the East Coast Rail Link, RM42 billion for Prasarana, and RM41 billion for PTPTN — mean future administrations will be burdened with liabilities that continue to grow.

deepening fiscal crisis

He cautioned that the government’s savings are already being swallowed by interest payments on existing debt, leaving little fiscal room for new priorities. “We saved RM17 to RM18 billion, and all of it was burned paying interest,” he said.

Rafizi urged the Finance Ministry to be transparent about the full scale of federal guarantees and to initiate a comprehensive reform of debt management. Without this, he warned, Malaysia’s next government will inherit a worsening debt trap with limited ability to fund development or social spending.

Business News