KUALA LUMPUR: Malaysia’s fiscal deficit contracted 12 per cent year-on-year (y-o-y) to RM47 billion in the first seven months of 2025 (7M 2025), compared with RM53 billion a year earlier, CIMB Investment Bank Bhd reported. The narrowing gap was driven by a 5.8 per cent y-o-y increase in government revenue, outpacing the 1.6 per cent rise in total expenditure.
Fiscal Deficit
Revenue growth was supported by fiscal reforms, including retargeted energy subsidies, expanded SST and Sugar Tax, and phased e-invoicing for greater compliance. CIMB said Malaysia remains on track to achieve its 2025 fiscal deficit target of 3.8 per cent, with Budget 2026 expected to balance reforms and populist measures.
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