Development spending to proceed as planned despite oil price uncertainty

PUTRAJAYA: National development expenditure for next year will proceed as planned despite uncertainty over global oil prices, said Economy Minister Akmal Nasrullah Mohd Nasir.

He said managing oil prices was a pressing short-term issue, but the country's long-term development commitments must be maintained.

"So far, we have received a commitment that next year's national development expenditure will proceed as planned at the Economy Ministry level," he said at the Economy Ministry's monthly gathering here today.

On the impact of oil price volatility on the country, Akmal said the most significant effect would be on government fuel subsidies.

He said the matter was being studied by the Finance Ministry to balance the need to manage the impact of supply disruptions on the public with the fiscal burden borne by the government.

"This issue is certainly under the scrutiny of the Finance Ministry to balance the need to ensure the impact of supply disruptions on the public is managed as best as possible, while also addressing our fiscal burden.

"Uncertainty surrounding oil prices remains significant as movements can shift due to several unpredictable factors," he said.

Akmal said there was still room to ensure the burden of rising global oil prices on the public was managed as effectively as possible.

Earlier, analysts expected Budget 2027 to come under pressure if global crude oil prices surged to US$120 a barrel due to higher fuel subsidy expenditure, which could reduce fiscal space for development spending and other programmes.