Govt increased OE, DE by 3.3% in Budget 2025

The government has allocated RM421 billion in Budget 2025, representing a 3.3% increase from the revised 2024 budget, which accounts for 20.2% of the GDP. Of this, RM335 billion (79.6%) is for operating expenditure (OE), while RM86 billion is designated for development expenditure (DE). The budget prioritizes the social sector (38.7% of total expenditure), followed by the economy (14.8%), security (10.1%), and general administration (5.5%).

Budget Prioritizes Key Sectors

Debt service charges are set at RM54.7 billion, with 98.5% for domestic loans. Emoluments make up the largest OE component (31.6%), expected to rise by 6.2% to RM105.9 billion due to the Public Service Remuneration System (SSPA) implementation, which increases salaries by 7-15%. Retirement charges are forecasted to grow by 17.7% to RM40.6 billion, while subsidies and social assistance will drop by 14.4% to RM52.6 billion due to subsidy rationalisation.

For DE, the economic sector receives the largest share (46.5%), including RM3.1 billion for trade and industry, with funds allocated to NIMP 2030 and NETR. The transportation subsector will gain RM17.6 billion to improve rural connectivity and reduce urban congestion, featuring projects like the Pan Borneo Highway. Additionally, RM40 billion is designated for infrastructure to boost national competitiveness, and RM7.1 billion is set for public transport and real estate investments. The social sector’s budget increases by 6% to RM29.9 billion from 2024.

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