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2023 budget visualised page illustration

How big is Budget 2023?

RM386.14 billion

The allocation is RM13.84 billion more than the version of Budget 2023 tabled last October and is RM54.05 billion more than the one tabled for 2022.

Note: Excludes RM2 billion contingency und.

Stay tuned for more updates on this page.

How big is Budget 2023?

Budget 2023 is being retabled after the one presented by the Ismail Sabri Yaakob government last October was junked due to Parliament being dissolved.

It’s the first time since 2000 that a budget has to be retabled.

But unlike in 2000 - where the government just retabled the same budget it presented at the tail-end of 1999 - the new Budget 2023 is significantly different compared to its previous iteration due to a change in administration.


It’s also Prime Minister/Finance Minister Anwar Ibrahim’s first budget in 26 years.

Now finally the head of government, Anwar - who was once ranked Asia’s best finance minister - ambitiously seeks to expand spending while also reducing the deficit in his comeback budget.

Expectations vs reality

The new Budget 2023 benefits from a better-than-expected economic recovery last year.

The gross domestic product (GDP) growth of 8.7 percent for 2022 exceeded the estimate of between 6.5 to 7 percent made last October.

Tax and non-tax revenues also surged past expectations due to the economic recovery and higher commodity prices.

This translated to the revised revenue for 2022 being RM9.2 billion higher than the previous estimate and RM60.4 billion more than the estimate made in late-2021.

Budget year

Expected revenue

(RM bil)

Revised revenue

(RM bil)

Revenue Difference

(RM bil)


Source: Fiscal Outlook and Federal Government Revenue Estimates

*Originally estimated at RM285.2 billion by Ismail Sabri government

**Originally estimated at RM272.6 billion by Ismail Sabri government

However, actual subsidies too exceeded the already revised estimate.

Originally, when Budget 2022 was tabled, the government planned to spend just RM17.4 billion on subsidies.

However, the Ukraine war and domestic food supply shortages caused the price of goods to skyrocket.

This led the government to spend significantly more on subsidies.

In October, the Ismail Sabri administration estimated that subsidies for 2022 would hit RM58.9 billion.

However, new estimates showed the figure increased by another RM8.5 billion to RM67.4 billion.

Moving forward, the new Budget 2023 estimate for subsidies is about RM16.6 billion more than what was planned for in October but still markedly less than what was spent last year.

This is in part due to Putrajaya pushing ahead with plans to make subsidies more targeted.

While global economic uncertainties remain, Putrajaya is optimistic that domestic growth will continue to propel Malaysia forward.

Where’s the money coming from?

The new Budget 2023 is an expansionary budget.

Despite the higher allocation, the government is borrowing less this year than originally planned by the Ismail Sabri administration.

Instead of 26.8 percent of Budget 2023 coming from borrowings as was planned for in October, the Anwar administration is reducing this to 24.5 percent.

The difference is expected to be covered by more direct taxes and non-tax revenues.

The bumper revenue in 2022 also allowed the government to lower the deficit to 5.6 percent, outpacing the original target of 6 percent for last year.

In line with this, the new Budget 2023 revised the deficit target for this year from 5.5 percent to 5 percent.

Despite lowering the deficit and slashing borrowing, the revenue for this year is still expected to be about RM2.9 billion lower than in 2022.

With this in mind, the government is conservatively estimating that the debt-to-GDP ratio for 2023 will slightly increase to 62 percent.

This is lower than the projections by the Ismail Sabri administration, which estimated that the debt-to-GDP ratio may hit the 65 percent statutory ceiling set during the pandemic.

On contributions from key institutions, Petronas is expected to pay a dividend of RM40 billion this year, which is RM5 billion more than the initial projection from October.

Petroleum revenue as a whole, however, is expected to be lower based on an estimated crude oil price of US$80 per barrel.


Budget 2023

(RM bil)

Budget 2022

(RM bil)

Actual 2022

(RM bil)

Bank Negara2.7555
Retirement Fund Incorporated (KWAP)353

Source: Fiscal Outlook and Federal Government Revenue Estimates 2022, 2023

1MDB dues

1MDB’s debts as of this year stand at RM18.5 billion.

Of this amount, RM13.2 billion from a bond will have to be paid next month.

The trust account for recovered 1MDB assets only had an estimated balance of RM1.9 billion as of end-2022, meaning the bulk of the upcoming payment will have to come out of pocket.

The trust account was used to make repayments of over RM14 billion last year on two other bonds taken out by 1MDB.


Amount owed

(US$ bil)

Amount owed

(RM bil)

Payment due

Global bond313.2

March 2023


May 2039

Source: Fiscal Outlook and Federal Government Revenue Estimates 2023

What’s next?

From 2020 to 2022, the government had to borrow considerably as the country struggled due to the Covid-19 pandemic.

But with less borrowings this year, the percentage of the budget used to pay off debts is expected to decrease to the target originally planned for in 2020 - before the pandemic hit.

While Anwar has not yet committed to implementing broad-based taxes in order to increase revenue, he has pledged to continue efforts to be more financially responsible while cutting leakages.

His administration has also committed to address long-term issues that may take a toll on the government’s coffers such as climate change, natural disasters, and food security.

Allocation for ministries

Note: Several ministries were restructured or consolidated under the Anwar government.

Changes in spending by sectors

Bonus for civil servants

2011-20151/2 month
*Max Grade 56


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Published by Kini News Lab on Feb 24, 2023.

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