Economic Update
Local
13th Malaysia Plan - Charting a sustainable growth path with fiscal discipline
Fri, 01-Aug-2025 08:53 am
by Research Team • Apex Research

  • The 13MP, themed “Reshaping Development,” outlines a policy framework to advance the MADANI economic vision, with emphasis on inclusive growth, high-growth high-value (HGHV) industries, the digital and AI-driven economy, and social system reform. 

  • We see the fiscal deficit target of below 3% of GDP by 2030 as reasonable, but contingent on continued delivery of politically sensitive fiscal reforms.           

  • Development expenditure is set at RM430bn for 2026–2030, averaging RM86bn annually and matching 2025’s allocation. This suggests a prudent approach to sustaining fiscal support while keeping spending in check.       

  • Real GDP is projected to expand by 4.5–5.5% p.a. in 2026–2030, broadly in line with the estimated 5.1% p.a. in 2021–2025. With external risks still elevated, private consumption is likely to remain the main growth driver.

  • The 13MP was broadly constructive for the long term as it reaffirmed policy continuity in Malaysia’s key growth pillars, including technology and energy transition.

  • The primary surprise in 13MP, in our view, is Malaysia’s intent to actively develop downstream rare earth elements value chains. This move is highly strategic as it secures access to critical raw materials essential for semiconductors, EVs, and RE technologies, thereby strengthening Malaysia’s positioning as a regional advanced manufacturing hub.

  • We are maintaining our 2025F year-end FBM KLCI target at 1,680, based on an assigned P/E multiple of 14.5x. Our top picks are SCGBHD (BUY, TP: RM2.14), UUE (BUY, TP: RM1.06), SLVEST (BUY, TP: RM2.61), and TENAGA (BUY, TP: RM16.04).
Sentiment: Positive
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