Budget 2025 reflects sound fiscal prudence, says Khazanah Research

KUALA LUMPUR (Oct 18): The government's focus on both subsidy rationalisation and broadening of the tax base under Budget 2025 reflects sound fiscal prudence, said Khazanah Research Institute (KRI), which would bolster the country's resilience amid increasing global uncertainty.

KRI in a statement following the budget announcement on Friday said that Budget 2025 managed to balance both the government's agenda of advancing Malaysia’s economy as well as protecting the well-being of the rakyat, supported by a commitment to fiscal reforms and inclusive growth.

"KRI lauds the government’s resolve to embark on RON95 rationalisation, with the resulting savings directed towards strengthening key sectors, including health, education, and social welfare," it said.

The research firm noted the government's continued focus on training initiatives, particularly the emphasis on technical and vocational education and training (TVET), which has expanded to various critical sectors such as semiconductors, robotics, and artificial intelligence.

"Targeting the urban poor, rural communities, and indigenous youth will prepare our most vulnerable to thrive in an ever-evolving economy," KRI said.

KRI also commended the increased minimum wage threshold, from RM1,500 per month to RM1,700 per month, and the establishment of a wage guide for all sectors.

On top of that, the expansion of the Sumbangan Tunai Rahmah to RM13 billion, along with other targeted assistance, is said to be well positioned to help the rakyat manage the impact of subsidy rationalisation.

"Overall, KRI sees Budget 2025 as a step forward for Malaysia’s development, striking a crucial balance between raising the country’s global economic standing and uplifting the well-being of the rakyat," it concluded.

KRI is a not-for-profit think tank sponsored by Yayasan Hasanah and the government's sovereign wealth fund Khazanah Nasional Bhd. As the prime minister of Malaysia, Datuk Seri Anwar Ibrahim is the chairman of Khazanah.

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