AmBank Group CEO Jamie Ling
Jamie Ling, group CEO, AmBank Group
WITH the total Budget 2025 allocation of RM421bil, a historic high, the budget is a fiscal tightrope of a balance between the short-term demands and long-term fiscal sustainability needed to support economic growth in the coming years.
With the development expenditure continuing to be high at RM86bil next year, this is positive as the government continues to reflate the economy and invest in our future.
Malaysia’s 2025 economic outlook remains favourable, driven by AmBank Group’s projection of 4.6% GDP growth (Budget 2025: 4.5-5.5%) and private consumption growth of 4.9% (Budget 2025: 5.9%).
The economy’s growth momentum is also expected to be supported by ongoing infrastructure projects and increased investments in new technology-related sectors.
The wage growth should also support consumer spending and the cost of living by improving disposal income.
Industrialisation remains a critical pillar of Malaysia’s economic growth and nation-building.
This Budget supports the economy by providing the necessary allocations to increase the economic multiplier to trade and the services sector, including financial services.
Budget 2025 offers a promising outlook for Malaysia’s SMEs, and we particularly laud the continuation of the SJPP initiative and SME loan of RM3.8bil by Bank Negara, which will propel our corporations to a higher level.
We commend the government’s continued emphasis on this sector to nurture future industry champions.
At AmBank Group, we share this commitment, as we, too, are committing more capital to support our SME customers' growth agenda.
Maybank president and group CEO Datuk Khairussaleh Ramli
Datuk Khairussaleh Ramli, president and group CEO of Maybank, and chairman of The Association of Banks in Malaysia
BUDGET 2025, anchored on three pillars of driving positive economic progress, generating transformative reforms, and ensuring the continued prosperity of the people, aims to address poverty reduction and support better wealth distribution towards a sustainable and inclusive economic growth. This is apt towards strengthening Malaysia’s position as a high performing nation, in line with the holistic Madani Economy framework and other national policies. The banking industry will continue to care for the welfare of the employees especially those in the lower income categories.
The reinforced commitment towards fiscal discipline is commendable by the sustained progress in lowering fiscal deficit to 3.8% next year from 4.3% in 2024 towards the medium term target of 3%.
We also welcome the call for further dialogue on the scoping of Service Tax that will be expanded to commercial businesses including fee based financial services as well as the introduction of Dividend Tax. The banking industry’s priority remains to deliver value to customers by providing reliable and trusted banking services.
Catalytic initiatives on infusing the adoption of Artificial Intelligence (AI) and digital transformation across key sectors is significant for the country and the region. This early realisation on the importance of AI, while ensuring it is applied responsibly through the ASEAN AI Safe framework, would heighten ASEAN’s global competitiveness. On this point, special tax deductions given to higher learning institutions offering courses on AI, digital technology, robotics, and among others is certainly a booster for the nation as it will provide high income jobs in the future.
In addition, with Malaysia assuming the ASEAN Chairmanship this year, Maybank through its presence in all 10 ASEAN countries will actively engage and connect individuals, businesses and governments for concerted growth, especially in the areas of sustainability, transition finance, trade finance, Islamic Finance and wealth management. Maybank looks forward to continuing to play its part in the strategic economic zones as well as industries such as data centre, semi-conductor and emerging new technologies.
The allocation of RM20 million towards National Scam Response Centre (NSRC) and launch of National Fraud Portal is a continued initiative to further mitigate scams. Collective efforts by the banking industry and close collaboration with Bank Negara Malaysia and the enforcement agencies have contributed in blocking suspicious transactions, and we remain focused in ensuring the safety of the public transacting online.
On the sustainability front, the Budget remains steadfast in accelerating the nation’s net-zero aspirations. From a financing point of view, Maybank will provide sustainable and transition finance solutions to address climate resiliency efforts, anchored on values-based financial services. On the move to encourage electric vehicle (EV) ownership, Maybank has already secured 29% market share based on the total number of EV sold in Malaysia as of August 2024.
Meanwhile, RM100 million matching funds provided to encourage new Islamic financing innovation based on Islamic values will further enhance the Islamic finance sector. The prospects of growth is immense, and Maybank will continue to offer responsible and effective financing solutions for individuals and businesses, particularly SMEs via our values-based financial solutions.
Maybank reiterates its commitment to support the realisation of Budget 2025, in serving our customers and stakeholders towards financial inclusion and economic empowerment.
CIMB Group CEO Novan Amirudin
Novan Amirudin, CEO, CIMB Group
We laud the government’s bold move to creatively expand the tax base by introducing carbon and dividend taxes and expanding the scope of SST.
This, alongside the reduction of blanket subsidies, enhanced support for MSMEs, and implementation of strategic blueprints like the NETR, NIMP and JSSEZ will give the government more firepower to spend as needed to boost our economy, pursue shared prosperity and further spur foreign direct investments (FDIs).
Hong Leong Bank group managing director and CEO Kevin LamKevin Lam, group managing director and CEO, Hong Leong Bank
WE view Belanjawan 2025 as a positive step towards achieving a sustainable and inclusive economy. We are encouraged by the Government's commitment to balancing economic growth with fiscal responsibility, evident in the continued focus on high-impact projects and ongoing subsidy reforms.
The emphasis on "Raising the Ceiling" through initiatives that promote competitiveness and value-added activities aligns with HLB's focus on supporting businesses and driving innovation in key sectors.
We commend the government for demonstrating policy continuity and follow-through on initiatives from various strategic policies and master plans introduced earlier. This is a testament to their commitment to realizing the visions and aspirations under the MADANI Economy Framework.
While this is another expansionary budget with total allocation topping RM421bil, the highest on record, the government remained mindful of its fiscal responsibility.
This can be seen from various revenue-enhancing initiatives such as broadening taxation (SST, for instance) and spending rationalization, such as ongoing subsidy reforms (targeted subsidy reform for RON95 in mid-2025), and channeling allocations to more productive high-impact and high-spillover projects.
As a result, the fiscal deficit is expected to further narrow to RM80bn or 3.8% of GDP next year, from RM84bn or 4.3% of GDP in 2024, bringing us closer to the 3.5% target outlined in the Medium-Term Fiscal Framework (MTFF) 2025-2027. This is certainly positive for Malaysia's sovereign rating, further supported by continued moderate growth prospects of 4.5-5.5% for 2025, and a manageable inflation outlook at 2.0-3.5%.
HLB supports the various incentives aimed at driving investment and businesses, in line with the Public-Private Partnership (PPP) Master Plan 2030, which includes a PPP financing mechanism, and initiatives to nurture SMEs to become regional champions.
We also applaud the efforts to strengthen the financial ecosystem with a focus on renewables and the green economy. The implementation of new and ongoing infrastructure projects and realization of various approved investments will continue to underpin expansion in private investment and create more job opportunities.
The continuation of cash assistance to targeted segments is a welcome initiative. This, coupled with earlier-announced civil servant pay hikes, is expected to help further alleviate the rising cost of living pressures, aligning with the government's priority of raising the floor by improving the quality of life. This should bode well for consumption and the services sector going forward.
Overall, HLB is confident that Budget 2025 will contribute to the long-term growth and sustainability of the Malaysian economy. We look forward to playing an active role in supporting the government's vision for a more prosperous and inclusive future.
RHB group managing director and CEO Datuk Mohd Mohd Rashid Mohamad
Datuk Mohd Rashid Mohamad, group managing director and CEO, RHB Banking Group
AS we prepare to chair ASEAN, Malaysia is well-positioned to drive economic, social, and environmental resilience. The introduction of special incentives for the Johor-Singapore Special Economic Zone (JS-SEZ) reflects our commitment to enhancing Malaysia’s economic relevance.
This budget champions transformative initiatives while also addressing the impact of subsidy rationalisation on fiscal health.
By streamlining subsidies, the government can redirect funds towards critical areas. Key initiatives such as the National Energy Transition Facilitation Fund, which will allocate over RM300mil in 2025, demonstrate Malaysia’s commitment to a greener future.
The Net Energy Metering (NEM) programme has also been extended to mid-2025, allowing more rooftops to adopt solar photovoltaic (PV) systems, thereby promoting renewable energy adoption.
The Green Technology Financing Scheme (GTFS), with an allocation of RM1bil, and the upcoming carbon tax on the iron, steel, and energy industries, reinforce Malaysia’s sustainability goals and ensure an inclusive transition to a low-carbon economy.
Tax incentives, such as investment tax allowances and income tax exemptions, will also encourage Carbon Capture, Utilisation, and Storage activities.
Furthermore, the budget prioritises social welfare with increased allocations for the Sumbangan Tunai Rahmah (STR) to RM13bil and a minimum wage adjustment to RM1,700, significantly enhancing living standards.
With the allocation of RM40bil as loan facilities and business financing guarantees and allocation of RM50mil Digital Matching Grant can enhance SMEs and MSMEs competitiveness.
Affin Bank president and group CEO Datuk Wan Razly Abdullah.
Datuk Wan Razly Abdullah, president and group CEO, Affin Bank Bhd
AFFIN Group welcomes the expansionary and prudent budget of RM421 billion that was unveiled in the National Budget 2025, which includes RM335bil for operating expenditure and RM86 billion for development expenditure, aiming towards fostering sustainable and inclusive economic growth.
The fiscal deficit position is targeted to consolidate from 5% of GDP in 2023 to 4.3% of GDP in 2024 and 3.8% of GDP in 2025. We believe the strengthening of fiscal buffers will be significant in the country’s financial resilience to support the economic priorities as well as provide ample fiscal policy space to support economic activity in any situation.
Malaysia’s growth remains influence by global economic uncertainties and volatility in energy and commodity prices, but with strong economic fundamentals and domestic demand-driven growth, the Malaysian economy remains resilient.
The Government expects the country’s underlying real GDP growth to expand at a steady growth of between 4.5-5.5% in 2025, as compared to an estimated 4.8% to 5.3% for 2024.
The National Budget 2025 measures, marking the final year of the Twelfth Malaysia Plan (12MP), also set the groundwork for the development plan of the Thirteenth Malaysia Plan (13MP), which will span from 2026 to 2030.
These measures aim to propel the country into a new era of growth by adopting transformative economic strategies. Notably, the introduction of a strategic investment fund worth RM1 billion seeks to enhance local talent capacity and promote high-value activities within the nation.
SMEs are the backbone of the Malaysian economy, yet they remain the most vulnerable to economic challenges. We fully support the Government’s efforts to drive the growth of micro-SMEs and SMEs through targeted loan and financing facilities.
In the National Budget 2025, the Government provided more than RM40bil on loan facilities, funds and guarantees to provide business assistance and financing to MSMEs.
We are encouraged to see that the strategies and programmes outlined in the National Budget 2025 to support economic growth, facilitating industry transformation and productivity growth to create a conducive business environment.
UOB Malaysia CEO Ng Wei Wei
Ng Wei Wei, CEO, UOB Malaysia
THE National Budget 2025 reflects the Government’s strong commitment to strengthen fiscal reforms, advance growth and improve the well-being of the people. The government’s gradual approach to fiscal consolidation seeks to balance responsibilities while maintaining stable growth drivers. It signifies the Government’s commendable commitment to rebalancing, restructuring, and reforming the economy in a sustainable and inclusive manner.
We welcome the introduction of the New Investment Incentive Framework that marks a strategic shift towards promoting high-value economic activities, particularly in sectors like Electrical and Electronics (E&E) and Artificial Intelligence (AI).
By incentivising education in emerging technologies and strengthening local supply chains through tax benefits for joint ventures between multinational enterprises and local suppliers, the framework aims to create high-paying jobs and foster regional economic development.
Additionally, the emphasis on Environmental, Social, and Governance (ESG) principles through incentives for sustainable practices demonstrates a commitment to balancing economic growth with environmental responsibility.
The introduction of a Carbon Tax on the iron, steel, and energy sectors in Malaysia by 2026 is a strong significant step towards incentivising low-carbon technologies. Aligned with other international ESG regulations such as EU’s Carbon Border Adjustment Mechanism (CBAM), this measure demonstrates the government's firm commitment to decarbonisation.
Overall, this comprehensive budget lays a solid foundation for resilience and growth, and UOB Malaysia is committed to supporting Malaysia in its next phase of development.
OCBC Bank (Malaysia) Bhd CEO Tan Chor Sen
Tan Chor Sen, CEO, OCBC Bank (Malaysia) Bhd
THE focus on ensuring the country’s infrastructure development is given top priority, which is a step in the right direction as it paves the way for economic excellence. With the emphasis on ensuring transportation and other infrastructure programmes are implemented smoothly, we believe the country will be moving further along in its quest to becoming a high-income nation.
We are particularly interested to learn that efforts are well underway to make the Johor-Singapore Special Economic Zone (JS-SEZ) a reality and look forward with anticipation to participating in the initiatives that will be rolled out.
We are excited over the to-be-announced special incentives for attracting high quality investments and creating employment that is commensurate with the required expertise for the tasks. We also look forward to the rollout of details pertaining to the Invest Malaysia Facilitation Centre – Johor (IMFC-J) and to undertaking our role as part of the second largest financial services group in the region to help make the ideals become reality. This is because we see the critical role the Johor region plays in economic development for attracting investments from the ASEAN-Greater China region.
The efforts to encourage the use of low carbon technology is yet another of the government's moves in the right direction as we aim to collectively encourage sustainable practices among all Malaysians. In line with OCBC’s aspiration to be Asia’s leading financial services partner for a sustainable future, we welcome the move to introduce carbon tax by the year 2026 which will be channelled to funding research and green technology.
Standard Chartered Malaysia chief executive officer Mak Joon Nien.
Mak Joon Nien, CEO, Standard Chartered Malaysia
BUILDING on the previous Budget that has laid a strong foundation through fiscal responsibility, this third MADANI Budget strikes a commendable balance between safeguarding the rakyat’s well-being amid the high cost of living environment, uplifting wages and driving economic resiliency.
We are pleased to see Malaysia’s robust economic growth and improved ringgit performance in 2024 have provided flexibility for the country’s highest-ever Budget allocation of RM421bil.
The country’s continued commitment towards reducing fiscal deficit to 3.8% next year is a crucial step towards enhancing economic stability and instilling greater investor confidence. In summary, the five key takeaways are:
- The strength in investment growth in 2024 is likely to persist in 2025. Total public investment is expected to total RM120bil in 2025. This includes the budget allocation of RM86bil towards development expenditure, RM9bil from public-private partnerships and investments from GLICs totalling RM25bil. The strong private sector support is in addition to strong private investment sentiment that saw total investment account for 43% of GDP growth in 1H 2024. Foreign investor interest in Malaysia is also high, with the economy attracting a total of RM30bil in foreign direct investment inflows in H1, particularly as Malaysia gains prominence as a data centre hub in Southeast Asia.
- The continued targeted subsidy rationalisation showcases consistent efforts by the government to enhance spending efficiency, optimise resource allocation to ultimately promote sustainable economic growth. Importantly, it bolsters foreign investor confidence by signalling that the government is committed towards its fiscal consolidation efforts.
- We look forward to the roll-out of a new investment incentive framework in Q3 2025 that will introduce tax incentives and reliefs to multinational enterprises (MNEs) and local suppliers to ensure supply chain resilience. This will undoubtedly attract more investments into Malaysia and encourage more collaborations between local and international companies. One benefit we see is the increased visibility of the electrical and electronics (E&E) sector, further reinforcing Malaysia’s position as a major player on the world stage.
- The provision of special incentives to attract quality investments and create high-value job opportunities in the Johor-Singapore Special Economic Zone (JSSEZ) by the end of this year will give it the extra boost to grow as an advanced SEZ.
- Despite being the backbone of a nation’s economy, equitable access to financial support continues to be a main challenge for SMEs. We are pleased to see continued focus on SMEs with the provision of up to RM40bil in financing facilities and credit guarantees.
