Budget 2025 allocation at RM421 billion, up 3.3 per cent from last year

The government had previously revised the 2024 expenditure upwards to RM407.5 billion from RM393.8 billion after taking into account the additional spending on subsidies, among other things.

The Finance Ministry (MoF) said RM335 billion, or 79.6 per cent of Budget 2025's total expenditure, is channelled to operating expenditure (OE) while the remaining RM86 billion is allocated for development expenditure (DE).

The Education, Health and Defence Ministries are three primary beneficiaries of Budget 2025, collectively accounting for 31 per cent of the total," MoF said in its 2025 Fiscal Outlook and Federal Government Revenue Estimates report released today.

Sectorwise, the social sector is allocated RM163 billion (38.7 per cent) of total expenditure, followed by the economy (RM62.2 billion; 14.8 per cent), security (RM42.6 billion; 10.1 per cent) and general administration (RM23.1 billion; 5.5 per cent) sectors.

The remaining RM130.1 billion is budgeted for charged expenditures and transfer payments.

For 2025, OE is budgeted at RM335 billion, or 16.1 per cent of GDP, reflecting a 4.2 per cent rise versus the revised Budget 2024, due to higher allocations for emoluments, retirement charges and debt service charges (DSC).

Compared to the revised Budget 2024's OE, Budget 2025's OE allocation is RM321.5 billion (78.9 per cent) while the remaining RM86 billion (21.1 per cent) is earmarked for DE.

MoF further said the supplies and services allocation is expected to rise under Budget 2025 to meet the growing demand for effective public service delivery.

MoF said RM9.3 billion of the total OE would be allocated for grants and transfer to state governments, with RM7.2 billion designated for constitutional transfers.

"The largest portion of the allocation is for state roads maintenance," the ministry said.

The MoF emphasised that as Malaysia approaches 2025, the final year of the 12th Malaysia Plan (12MP), the DE allocation would be sustained at RM86 billion with the largest portion dedicated to the economic sector (46.5 per cent), followed by social (34.8 per cent), security (14.3 per cent) and general administration (4.4 per cent).

"About 2,000 new projects and programmes have been approved under the Fifth Rolling Plan with an estimated cost of RM58.6 billion.

MoF reiterated that the government remains steadfast in its commitment to enhancing spending discipline while implementing various rakyat-centric programmes.

"The overarching framework of the MADANI Economy guides the government initiatives, paving the 12MP's final year while laying a foundation for the 13th Malaysia Plan.