KUALA LUMPUR, October 17 2026, The government’s proposed RM83 billion development expenditure under Budget 2027 is expected to support job creation, stimulate business activity and drive growth across several key economic sectors, according to RHB Investment Bank Bhd (RHB IB).
The investment bank said the allocation would rise from RM81 billion in 2026, with funding focused on transportation, education and training, healthcare, and trade and industry.
In a research note, RHB IB said infrastructure upgrades, public transport expansion and green-transition initiatives could sustain public investment while encouraging greater private-sector participation.
Major projects expected to benefit include the East Coast Rail Link (ECRL), Elevated Autonomous Rapid Transit (E-ART) system, KL NODE and LRT3 Phase 2.
The bank also noted that ongoing data-centre developments in Selangor, Johor and Negeri Sembilan could support construction activity and increase demand for specialised engineering services.
Special Economic Zones to Drive Investment
RHB IB identified the development of special economic zones, particularly the Johor-Singapore Special Economic Zone (JS-SEZ), as a key driver of future investment.
The government is expected to strengthen the zone with a comprehensive master plan and blueprint by the end of the year.
The JS-SEZ attracted approximately RM132 billion in investments between 2025 and June 2026. Meanwhile, the proposed Sedenak Nexus is projected to draw a further RM12 billion in investments and create 45,000 jobs.
According to the bank, these initiatives could position Johor as a regional centre for advanced manufacturing, logistics, digital infrastructure and high-value services.
Trade along the Bukit Kayu Hitam-Sadao corridor also reached RM27 billion in the first half of 2026, supported by a direct road connection between Malaysia and Thailand. The corridor could further develop into a logistics, warehousing and cross-border manufacturing hub, benefiting Kedah and Perlis.
High-Value Industries and Skilled Employment
RHB IB also highlighted efforts to strengthen Malaysia’s Global Services Hub incentive framework to attract regional headquarters, treasury centres and shared services operations.
The expansion of these activities could create demand for skilled workers and support higher-paying jobs in finance, accounting, technology and management.
Key industries identified for further development include semiconductors, artificial intelligence, digital services, energy transition, pharmaceuticals, logistics and aerospace.
The bank added that tax incentives, investment facilitation, regulatory support and skills development could help promote technology transfer, research and development, innovation and the creation of high-skilled jobs.
-BERNAMA
