Last updated on August 2, 2025
KUALA LUMPUR (July 31): Under the newly unveiled 13th Malaysia Plan (13MP), the government is targeting an annual gross domestic product (GDP) growth rate of 4.5% to 5.5% between 2026 and 2030. This projection is part of the country’s latest five-year economic development strategy, released on Thursday.
This new target range follows an average growth rate of 5.2% from 2021 to 2024, which fell at the lower end of the 12th Malaysia Plan’s (12MP) 5%-6% target.
According to the plan, the federal government is allocating RM430 billion for development expenditure (devex) during the 2026–2030 period—averaging RM86 billion annually. The fiscal deficit is expected to narrow to below 3% of GDP by 2030, compared to 4.1% projected in 2024.
Economists surveyed by The Edge forecast GDP growth in the range of 4%-5.5% annually over the next five years, reflecting a more cautious outlook amid global economic uncertainties.
The RM430 billion devex target falls within The Edge’s economist poll estimate of RM400 billion to RM450 billion. For comparison, the 12MP’s allocation was initially RM400 billion, later increased to RM415 billion during its 2023 mid-term review, while the 11MP (2016–2020) stood at RM248.5 billion.
“This plan is not just rhetoric; it includes measurable economic targets to guide implementation and monitor outcomes,” said Prime Minister Datuk Seri Anwar Ibrahim when presenting the 13MP in Parliament.
Altogether, Anwar stated that RM611 billion is required to realise the goals of the 13MP. In addition to the RM430 billion devex, this includes RM120 billion in investment commitments from government-linked companies under the Gear-Up programme, and RM61 billion from public-private partnerships and private financing initiatives.
Of the RM430 billion in devex, RM227 billion is designated for the economic sector—including infrastructure, digital connectivity, public transport, flood mitigation, affordable housing, and capacity-building projects. Another RM133 billion will support the social sector, including RM67 billion for education and RM40 billion for healthcare. RM51 billion is allocated to national security, while RM17 billion will go toward public administration and governance reforms.
The 13MP also projects private investment growth of 6% annually (averaging RM417.9 billion per year) and public investment growth of 3.6% (averaging RM112.9 billion annually). Gross exports are forecast to expand by 5.8% per year during the plan period. Inflation is expected to remain stable between 2%-3%, in line with the 2.5% average recorded from 2021–2024.
Structural reforms and national priorities
The 13MP continues the government’s focus on raising living standards, restructuring the economy, and enhancing Malaysia’s position as a key economy in Southeast Asia.
Key sectoral targets include:
- Ensuring that 70.1% of graduates are employed in roles that match their qualifications by 2030.
- Reducing out-of-pocket health spending to 32% of total health expenditure and enabling 60% of citizens to have digital health records by 2030.
- Raising employee compensation (including salaries and benefits) to 40% of GDP, from the current level of just over one-third.
- Increasing average monthly household income to RM12,000 and reducing the absolute poverty rate to 4.7% by 2030.
- Constructing 500,000 additional affordable homes by 2030.
The 13MP is built on three central pillars: fostering an AI-driven economy, developing a human-centric society under the Madani framework, and building a sovereign and respected nation. These priorities are supported by over 120 strategies and more than 600 initiatives.
“We must act boldly yet prudently, correcting past missteps without compromising the wellbeing of the majority,” Anwar said. He also reiterated the government’s commitment to phased fiscal reforms through improved revenue collection and more efficient spending, including targeted subsidy rationalisation, to reduce the accumulation of public debt.
