Universiti Malaya (UM) senior economics lecturer Goh Lim Thye says there should be measures in the budget that combine inclusivity and productivity to protect households against external shocks.
“The idea is to create automatic stabilisers that soften the pressures on household spending and to prevent a sudden erosion of disposable income and consumer confidence,” he told FMT.
“For example, strengthening targeted fuel and food subsidies, offering temporary utility rebates, and expanding cash aid transfers like Sumbangan Tunai Rahmah can help to cushion households against the impact of global price swings.
“On the productivity side, more resources could be invested in technical and vocational education, small and medium-size enterprises (SME), and digitalisation and reskilling programmes to ensure that individuals do not fall deeper into financial stress when external shocks hit,” he added.
Goh also called for further targeted cash transfers to shield households from inflationary pressures.
“Direct cash transfers provide immediate liquidity to households, giving them flexibility to prioritise essentials like food, healthcare or school fees. The RM15 billion allocation for cash aid in 2025 can be adjusted to cushion inflationary pressures, if necessary,” he said.
He also called for more investments in sectors that command a high demand globally to provide even greater resilience against external shocks given the possibility that volatility in the market would persist.
Goh said investment in areas with rising global demand such as electronics, renewable energy components or halal products would provide the economy with greater resilience and help Malaysia weather external shocks more effectively.
Sunway University’s Yeah Kim Leng said the government should also prioritise efforts to attract both foreign and domestic direct investment into HGHV sectors by improving infrastructure and reducing regulatory burden to boost investor interest in Malaysia.
“Create enabling conditions and efficient operating environments such as issuance of permits and licences, well maintained infrastructure such as roads, and efficient public services with low regulatory burden.
“Any move to improve investor confidence in the country’s infrastructure will stimulate foreign and domestic direct investment in high value sectors,” he added.
Separately, Yeah emphasised that the government must ensure its spending is productive in order to meet its target of reducing the fiscal deficit to below 3% by 2030. “Investor confidence is key to achieving this goal,” he said.
“A deviation of one to two years may be tolerable without triggering adverse market reactions or undermining investor confidence — provided that government spending is not perceived as wasteful or unproductive,” he said.
Goh echoed these sentiments, stressing that a medium-term fiscal strategy grounded in discipline and clearly outlining a path toward fiscal consolidation was essential to keeping the deficit at sustainable and manageable levels.