Govt to ensure public financial management objectives result in better fiscal outcomes – MOF

Govt to ensure public financial management objectives result in better fiscal outcomes – MOF

KUALA LUMPUR: The government will ensure that the objectives of public financial management under the Public Finance and Fiscal Responsibility Act 2023 are translated into better fiscal outcomes through the strengthening of a rules-based governance framework to improve transparency and accountability, said the Finance Ministry (MoF).

It said that the Act sets clear fiscal targets, including deficit limits and debt management guidelines, to guide annual Budget planning, the Medium-Term Fiscal Framework, and the country’s five-year development plans, thereby ensuring spending discipline without compromising support for low-income groups and economic growth.

The government also maintains its commitment to annual development expenditure exceeding three per cent of Gross Domestic Product (GDP), prioritising high-impact spending such as targeted social protection, improved access to healthcare and education, as well as workforce skills development to ensure more effective use of public resources.

Additionally, the government is strengthening fiscal transparency through comprehensive reporting requirements, including the publication of documents such as the Economic Outlook Report, Fiscal Outlook and Federal Government Revenue Estimates, Federal Government Expenditure Estimates, and the Mid-Year Expenditure Performance Report, as well as introducing a Fiscal Risk Statement and a Tax Expenditure Statement.

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“These documents are published openly to enable the public, members of parliament, economic analysts, and investors to assess the government’s Budget allocations and fiscal policies,” the ministry said in a written reply to the Dewan Rakyat published on the Parliament’s website today.

This was in response to a question from Tan Sri Muhyiddin Yassin (PN–Pagoh), who asked the government to state the measures taken to ensure that the objectives of public financial management under the Act are clearly translated into better outcomes and greater fiscal transparency for the public.

The MoF also said it has institutionalised monitoring mechanisms through the Fiscal Policy Committee and requires the tabling of a fiscal adjustment plan in Parliament in the event of deviations from fiscal targets, to ensure that adjustments are implemented transparently and gradually without affecting social protection.

Apart from that, stronger fiscal governance is supported by solid economic performance, with GDP expanding by 6.3 per cent in the fourth quarter of 2025, bringing overall growth for 2025 to 5.2 per cent, exceeding the initial forecast of 4.0 to 4.8 per cent.

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Meanwhile, approved foreign direct investment totalled RM285.2 billion from January to September 2025, while the ringgit strengthened by 10.1 per cent against the US dollar in 2025, reaching RM3.9470 against the US dollar at the end of January 2026.

Overall, it said the implementation of Act 850 ensures more disciplined and transparent public financial management, while maintaining a focus on public well-being, economic resilience, and long-term fiscal sustainability.

– Bernama