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While government subsidies have successfully kept living costs stable, the long-term fiscal burden and looming interest rate hikes present new challenges for the economy.

While government subsidies currently shield Malaysians from volatile energy costs, analysts warn that long-term fiscal pressures are mounting.

Minister Datuk Mustapha Sakmud clarifies that the RM1.5 billion interim grant is not the final settlement for Sabah’s constitutional revenue rights.

Higher global rates and domestic term premiums are driving MGS and GII yields upward ahead of the September FOMC meeting.

Putrajaya is expected to balance growth and fiscal discipline in the upcoming federal budget.

Government plans to raise subsidised petrol and diesel quotas may inflate the national subsidy bill through the end of 2026.

Prime Minister Anwar Ibrahim has committed to recovering massive financial losses through systemic leakage to bolster the national economy and support Malaysian households.

Kenanga Research highlights that rising global oil prices create significant fiscal pressure due to the heavy burden of domestic fuel subsidies.

Kenanga Research warns that increasing Brent crude prices place significant pressure on Malaysia’s federal fiscal budget due to fuel subsidies.

Regulators flagged concerns regarding the financial health of the pilgrimage fund following significant asset-liability disparities.
