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KUALA LUMPUR - There is no need to review current projections under Budget 2027 based on the government’s fiscal performance for the first half of 2026, said Deputy Finance Minister Liew Chin Tong.
However, he said the government would continue to monitor current developments until Budget 2027 is tabled in October.
He said higher oil prices had increased government subsidy expenditure by an estimated RM40 billion.
"At the same time, this has also contributed to higher petroleum-related revenue, where every US$1 per barrel increase in world crude oil prices would likely add about RM300 million to petroleum-related revenue.
"This is excluding Petronas’ dividend contribution. The revenue gain can help cover part of the increase in fuel subsidy expenditure,” he said during the Oral Answers session in the Dewan Rakyat today.
Liew was replying to a supplementary question from Mohd Syahir Che Sulaiman (PN-Bachok) regarding the impact of increased fuel subsidies following the West Asia conflict on the Budget 2027 framework currently being drafted, the 2026 fiscal deficit target and the possibility of new taxes due to strains on the country’s fiscal position.
He said the government also regularly monitors revenue collection performance to ensure it can meet its operating expenditure needs amid geopolitical developments in West Asia.
"We are also monitoring the current economic situation through the implementation of continuous weekly engagement sessions by the crisis management task force under the National Economic Action Council (NEAC) to ensure that energy supplies and basic needs remain protected,” he said.
Commenting on the 2026 fiscal projections, Liew said the government has implemented immediate, comprehensive, and structured intervention initiatives to ensure that overall government expenditure could be maintained without affecting the country’s fiscal position.
"Fiscal projections will be announced during the tabling of Budget 2027 after taking into account current economic indicators as well as the performance of government revenue collection and expenditure in the first half of 2026,” he said.
He said the government remains confident that the medium-term fiscal consolidation trajectory can be maintained through the implementation of targeted subsidies, restructuring expenditure priorities, continued efforts to improve spending efficiency, and bolstering revenue collection and tax compliance.
Liew said the measures would ensure the country’s fiscal position remains sustainable while meeting government spending needs amid global economic uncertainties and current geopolitical developments. - BERNAMA