Federal Govt Deficit-to-GDP Ratio Down To 3.7 Pct In 2025 -- Audit Report

KUALA LUMPUR, Oct 5 (Bernama) -- The federal government’s financial performance in 2025 improved, with the deficit falling by RM3.878 billion, bringing the deficit-to-gross domestic product ratio to 3.7 per cent from 4.1 per cent in 2024.

According to the Auditor General’s Report (LKAN) 2/2026 on the Federal Government Financial Statements for 2025, federal government revenue collection amounted to RM336.069 billion, an increase of RM11.451 billion compared with RM324.618 billion in 2024.

“Operating expenditure in 2025 amounted to RM330.776 billion, resulting in a revenue surplus of RM5.293 billion, an increase of RM2.184 billion compared with RM3.109 billion in 2024,” the report released today said.

The development fund deficit also decreased by RM1.118 billion, or 10.6 per cent, to RM9.420 billion compared with RM10.538 billion in 2024, the report said.

New federal government borrowings in 2025 amounted to RM185.577 billion, a decrease of RM16.671 billion, or 8.2 per cent, against RM202.248 billion in 2024.

“The annual growth rate of federal government debt also showed a declining trend, from 10.2 per cent in 2022 to 5.9 per cent in 2025.

“Federal government debt amounted to RM1,320.776 billion, an increase of RM73.162 billion, or 5.9 per cent, against RM1,247.614 billion in 2024,” the report said.

In its audit recommendations, the report said the federal government should strengthen its revenue collection mechanisms through more strategic and effective measures to enable it to finance development expenditure more sustainably.

“The measures are also aimed at reducing the fiscal deficit and dependence on financing through new borrowings.

“In addition, more proactive enforcement and monitoring measures should be implemented to expedite the collection of outstanding receivables, reduce arrears and minimise the need for write-offs, which could result in losses to the federal government,” the report said.

-- BERNAMA