KUALA LUMPUR, Oct. 14 (Xinhua) -- Economists are positive on Malaysia's Budget 2026, which focuses on sustaining growth and consolidating the country's fiscal position.

With most of the planned structural reforms, such as the gradual rationalization of subsidies on electricity, eggs, diesel and RON95, as well as the expansion of sales and service tax and e-invoicing, already implemented or currently underway, Hong Leong Investment Bank said in a note on Monday that the Budget 2026 represents a year of calibration, focusing on effective policy execution and continued gradual fiscal consolidation to ensure sustained economic growth.

"With expectations of a challenging global environment in 2026, the government has adopted a pragmatic fiscal stance, focusing on maintaining macroeconomic stability while pursuing continued gradual fiscal consolidation," said the research house.

It concurred with the government's projection of 2026 gross domestic product at between 4 percent and 4.5 percent, in line with its own forecast of 4.1 percent.

Meanwhile, Anthony Dass, senior economic advisor to the KSI Strategic Institute for Asia Pacific and Small and Medium Enterprise National Council member, sees the budget as a reform budget for real growth.

"Budget 2026 is a reformist, future-focused, and confidence-building budget. It balances fiscal realism with developmental ambition, converts efficiency into equity, and positions Malaysia to compete on value, not volume," he said in a statement last Friday.

He also highlighted that the government's commitment in this budget to disciplined growth, empowered people, and sustainable prosperity sets the tone for the next decade of reform.

ANZ Research also said in a note on Monday that Malaysia's Budget 2026 advances its fiscal consolidation.

"Meeting the 2025 budget targets and the 2026 projections shows the government's commitment to fiscal consolidation. Barring unforeseen shocks, we are now more confident that medium-term budget deficit and public debt ratios will be met," the research house said.

It opined that this conservative fiscal policy is imperative for rebuilding fiscal buffers, as their depletion during the pandemic had increased Malaysia's vulnerability to external shocks. ■