13MP Diversifies Strategies To Keep Malaysia Resilient While Promoting Prudent Spending - Economists

By Durratul Ain Ahmad Fuad & Siti Noor Afera Abu

KUALA LUMPUR, July 31 (Bernama) -- The 13th Malaysia Plan (13MP) has been crafted with the core objectives of the MADANI Economy framework at its foundation while maintaining the flexibility to navigate both domestic and external uncertainties over the next five years, said an economist.

Putra Business School Associate Professor Dr Ahmed Razman Abdul Latiff also noted that the scope of the 13MP is broader compared to the 12MP, reflecting the country’s need to stay competitive and sustainable.

A wider focus is necessary, he said, as Malaysia cannot rely on a single path, and diversifying strategies is crucial to ensure resilience in the face of both global and local challenges.

“Some of the targets are realistic whilst some are a bit ambitious, but the government monitoring system will ensure that any intervention can be made in a timely and structured manner,” he told Bernama. 

Meanwhile, economist Professor Geoffrey Williams said the overall economic contribution is in line with normal development spending.

He said the federal government’s development expenditure will be RM86 billion per year as normal.

“The government-linked investment companies’ (GLICs) spending is the same as the GEAR-uP programme and the RM12 billion per year in public-private partnerships (PPP) is in line with normal spending.

“It is essential that good governance practices are in place to ensure efficient and effective spending to cut wastage, leakages and corruption. This will be the key difference to the MADANI approach compared to previous administrations,” he added. 

The 13MP, which aims to drive sustainable growth based on value creation across all sectors, involves RM611 billion in investments to ensure the success of the five-year plan, with RM430 billion being the government’s development allocation.

The funding from government-linked companies and GLICs would amount to RM120 billion to support economic growth through domestic direct investment in strategic sectors, while via the PPP method, support from the private sector stands at RM61 billion.

He said that of the RM430 billion allocation, more than half, or RM227 billion, will be channelled to the economic sector as the main pillar of the country’s growth.

Meanwhile, CIMB Investment Bank Bhd views the 13MP as a strategic blueprint prioritising fiscal consolidation while driving growth through semiconductors, artificial intelligence, clean energy, halal industry, and rare earth elements.

The investment bank said that aligned with the MADANI Economy framework and key national blueprints, the plan aims to boost Malaysia’s competitiveness and inclusivity while driving a resilient, technology-led economy over the next five years.

Furthermore, CIMB Investment Bank said the 13MP’s gross domestic product (GDP) growth expectation of 4.5 to 5.5 per cent annually is achievable given Malaysia’s economy grew by an average of 5.2 per cent during 2021-2024, supported by robust private consumption.

It said the 13MP sets a clear roadmap for structural transformation and fiscal discipline over the next five years, with a realistic growth target supported by robust private consumption and targeted investments.

“Hence, we maintain our 2025 GDP forecast at 4.3 per cent and expect the overnight policy rate to remain at 2.75 per cent till year-end,” it said.

Malaysia’s new tariff rate with the United States -- from the current 25 per cent -- is expected to be announced soon, and Budget 2026 is scheduled to be tabled on Oct 10, 2025.

-- BERNAMA