The Winners and Losers of Malaysia’s 2027 Spending Plan

Malaysia’s retail and tourism sectors are set to benefit as the government increases cash aid and raises the minimum wage to ease cost-of-living pressures in what could be Prime Minister Anwar Ibrahim’s final budget before a national election.

The government will allocate 16 billion ringgit ($3.9 billion) in handouts and maintain fuel subsidies at 40 billion ringgit next year to help households cope with rising costs, Anwar said in his budget speech on Friday. The minimum monthly wage will also be increased to 2,000 ringgit from 1,700 ringgit starting June.

The ringgit closed 0.2% higher at 4.0850 per dollar amid broad gains in regional currencies, while the country’s stock benchmark rose 0.5%.

Read: Anwar Budget Raises Minimum Wage Ahead of Malaysia Election ·

Here’s a look at some of the key winners and losers of the budget for 2027:

WINNERS

Consumption

Malaysia’s consumer sector is set for further gains after the government announced a nearly 7% increase in cash handouts as well as a marginal tax cut for middle-income earners, which may boost purchasing power across a broad swath of the population. That could bolster the outlook for retailers, including convenience store chain 99 Speed Mart Retail Holdings Bhd. and dollar-store Eco-Shop Marketing Bhd.

Tourism

The government will allocate 935 million ringgit to tourism and culture as it extends the Visit Malaysia campaign through 2027. This could benefit leisure companies Genting Bhd. and Genting Malaysia Bhd., and potentially troubled budget carrier operator AirAsia Group Bhd.

Borneo-based firms

Anwar raised allocations for the Borneo states of Sabah and Sarawak to a record, potentially providing a further lift to their economies. Resource-rich Sarawak, in particular, is emerging as one of Malaysia’s key growth engines.

Greater investment in Borneo could benefit companies such as Dayang Enterprise Holdings Bhd., Cahya Mata Sarawak Bhd., and port operator Bintulu Port Holdings Bhd.

LOSERS

Plantations, Glovemakers

Malaysia’s plan to raise its minimum wage by nearly 18% to 2,000 ringgit by June may increase costs for labor-intensive industries, including palm oil and glove manufacturing.

Plantation companies, particularly, are at risk given their heavy reliance on workers, including foreign labor. Malaysia is home to some of the world’s biggest palm oil companies, including SD Guthrie Bhd., IOI Corp., and Kuala Lumpur Kepong Bhd.

While most glovemakers have automated production lines, they may still face higher labor cost. The country is a major production base with companies such as Top Glove Corp., Hartalega Holdings Bhd., and Kossan Rubber Industries Bhd.

E-Commerce Giants

Malaysia is set to introduce laws to regulate the e-commerce industry to protect its small and medium enterprises, potentially impacting e-commerce giants that have gained strong market shares in the Southeast Asian country. Sea Ltd.’s Shopee, ByteDance Ltd.’s TikTok Shop and Alibaba Group Holding Ltd.’s Lazada all have major presence in the country.

High-Income Earners

Malaysia will lower the threshold for its 30% top tax rate to a chargeable income exceeding 1 million ringgit, from 2 million ringgit currently. That may weigh on the disposable income of high earners as Anwar channels more support toward lower-income groups.