Budget 2026 Aims To Lift Ceiling Of National Growth, Achieve High-income Status

KUALA LUMPUR, Aug 8 (Bernama) – Raising the ceiling of national growth is one of the three central pillars of the MADANI Economy to propel Malaysia towards a high-income, competitive and sustainable economy grounded in humanistic values and social justice, according to the Finance Ministry (MOF).

In a 2026 pre-budget statement today, the ministry said the pillar focuses on breaking through long-standing structural constraints, particularly the nation’s over-reliance on low- and medium-cost economic models.

“With the MADANI Economy setting the ambition for Malaysia to become one of the world’s top 12 most competitive economies, a fundamental transformation of our industrial base is indispensable.

“This includes elevating Malaysia’s position in global value chains and shifting towards higher productivity and innovation-driven growth,” it said.

MOF noted that the government is prioritising investment in high-growth high-value (HGHV) areas, covering new opportunities in frontier technologies and pathways anchored in sustainability.

Framework to Attract Quality Investments

To complement the nation’s industrial transformation, the government will continue refining its suite of strategic investment incentives, with the New Investment Incentive Framework slated for launch in the third quarter of 2025 to lead the way, MOF said.

“The goal is to tailor incentives to the economic returns of each sector, fostering a mutually beneficial dynamic that attracts quality investments while ensuring meaningful national gains.

“Budget 2026 will sharpen this approach by further streamlining approval processes, dismantling bureaucratic hurdles and realigning incentives to better reflect the complexity, value-add and technological intensity of targeted industries,” it said.

The ministry noted that these reforms aim to transform Malaysia into a facilitative, competitive investment destination that rewards innovation, prioritises long-term sustainability and positions the country at the forefront of economic value creation.

Unlocking Cascading Effects 

The ministry also said the strategic policy levers outlined under the MADANI Economy are designed to unlock cascading economic effects across the wider economy by building ecosystems that support HGHV sectors.

Budget 2026 will continue cultivating downstream ecosystems and accelerating regional development through several key focus areas.

Among the focus areas highlighted are supporting small businesses by easing access to export markets and financing their digital transition to improve productivity and competitiveness.

Tourism and services will also be a priority, leveraging Visit Malaysia 2026 to revitalise tourism and adjacent service sectors, it said.

“The government will also emphasise Islamic finance and economy, strengthen premium halal supply chains and cement Malaysia’s global leadership by leveraging Islamic finance as a key enabler,” it said.

MOF added that regional development will remain a key focus, aimed at diversifying economic growth beyond established urban centres by developing catalytic nodes across states, replicating models such as the Johor-Singapore Special Economic Zone, Kulim Hi-Tech Park and Penang Silicon Island.