Response from Datuk Wan Razly Abdullah, President & Group Chief Executive Officer
9 OCTOBER 2026, KUALA LUMPUR – AFFIN Group (“AFFIN” or “the Group”) welcomes the prudent budget, which sets out RM510 billion in total spending and investment, including RM459.8 billion in Federal operating and development expenditure. The Budget reflects the Government’s commitment to supporting economic growth, addressing cost-of-living pressures and maintaining fiscal discipline.
We are encouraged by the Government’s commitment to fiscal consolidation, with the fiscal deficit narrowing from 3.7% of GDP in 2025 to 3.6% in 2026, and a proposed target of 3.3% in 2027. Efforts to enhance revenue collection and manage public expenditure prudently remain important, alongside the flexibility to pursue development projects and strategic investments that support sustainable, long-term economic growth.
Budget 2027 comes at a pivotal juncture as Malaysia navigates shifting geopolitical dynamics, evolving global trade patterns and continued cost pressures. With the economy projected to grow between 4.2% to 5.2% in 2027, we believe the country’s transition towards higher-value industries, technological innovation and deeper regional integration presents opportunities to enhance productivity and competitiveness.
We welcome the Government’s continued emphasis on easing cost-of-living pressures, including the increase in allocations for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) to RM16 billion in 2027, alongside measures to provide greater tax relief for middle-income households. These initiatives are expected to support household spending, improve disposable income and sustain domestic economic activity.
Equally encouraging are measures to improve access to homeownership, including the RM20 billion housing financing guarantee under Syarikat Jaminan Kredit Perumahan (SJKP), which is expected to benefit 80,000 first-time homebuyers. AFFIN remains supportive of initiatives that broaden financing accessibility and is dedicated to helping more Malaysians realise their homeownership aspirations through accessible and tailored financing solutions that cater to diverse income profiles and evolving customer needs.
Micro, small and medium enterprises (MSMEs) remain pivotal to Malaysia’s economic transformation, contributing 39.7% of the Malaysia’s GDP in 2025 and accounting for 48.7% of total employment. The Government’s decision to reduce MSME income tax rates by one percentage point, is a positive step benefiting an estimated 300,000 businesses, alongside the expansion of loan and financing guarantee facilities to RM57 billion in 2027, and the RM3.5 billion allocation for trade and industry, including SME programmes. These measures are expected to provide businesses with greater financial flexibility while supporting investment, productivity and long-term competitiveness.
Beyond conventional financing, we believe a more diversified capital ecosystem, including private equity and other forms of growth capital, can complement traditional banking solutions, particularly for enterprises seeking to scale, innovate and pursue regional opportunities. AFFIN’s recent US$400 million financing collaboration with the International Finance Corporation (IFC) reflects our focus on broadening access to financing for eligible MSMEs, including women-owned enterprises and businesses in underserved regions.
The continued focus on Sabah and Sarawak, with Federal allocations of RM18.7 billion and RM16.2 billion, respectively, in 2027, is particularly encouraging. The sustained investment in infrastructure, connectivity and regional development is expected to unlock new economic opportunities while supporting more balanced growth across the country. For AFFIN, this aligns well with our strong franchise in East Malaysia, where projects such as the Pan Borneo Highway Sabah, the Sarawak-Sabah Link Road and new gas developments are expected to generate financing opportunities across the infrastructure value chain.
The proposed introduction of tokenised retail savings sukuk is a positive development that broadens access to investment opportunities and reinforces Malaysia’s leadership in Islamic finance. This creates opportunities for AFFIN ISLAMIC to support growing demand for sukuk and Shariah-compliant financing, particularly across high-growth sectors such as energy, utilities and data centres.
Malaysia’s tourism sector remains resilient, supported by strong regional demand, particularly from ASEAN and China. The extension of Visit Malaysia to 2027, alongside the RM935 million allocation for tourism and culture, major events such as the SEA Games and LIMA, and improved connectivity through the ECRL and Johor Bahru–Singapore RTS Link, is expected to stimulate tourism and local economic activity. Supported by access to financing and digital payment solutions, these developments will create opportunities for businesses in hospitality, retail and tourism-related services, including in Sabah and Sarawak.
Looking ahead, we believe Budget 2027 presents a meaningful economic outcome, from improving household financial well-being and supporting homeownership to enabling businesses to grow and participate in emerging economic opportunities. At AFFIN, our focus remains on delivering relevant financial solutions, supporting businesses and helping more Malaysians participate in the country’s economic progress.
