PENANG’s strong economic outlook, driven by high-value investments and sustained growth, formed the core of Chief Minister Chow Kon Yeow’s winding-up speech at the State Legislative Assembly today.
With Penang’s Gross Domestic Product (GDP) projected to reach RM121.5 billion for 2025 in line with an expected growth rate of 4.8 per cent, Chow (PH-Tanjong Bunga) highlighted the state’s exceptional performance, which continues to position it among Malaysia’s leading economic contributors.
“Penang’s strong economic growth is a reflection of our strategic efforts to position the state as a hub for high-tech industries, innovation, and international trade.
“As we move towards the Penang2030 Vision, our focus remains on sustainable growth, economic diversification, and enhancing the well-being of our people,” Chow said.
Penang’s GDP per capita for 2024 stood at RM76,033, significantly above the national average of RM56,734, reflecting the state’s competitive edge in attracting high-value investments.
“Our GDP per capita, which surpasses the national average, is evidence that Penang is not only keeping pace with national growth but is excelling in creating a high-value, innovation-driven economy.
“This achievement is no coincidence, as the successes stem from consistent policy direction, meticulous planning, and strong confidence from global investors in the state’s stability and capabilities,” he said.
Penang remains one of the country’s top destinations for foreign and domestic investment. As of September 2025, the state has recorded manufacturing investments amounting to RM15.79 billion, a milestone that demonstrates Penang’s economic resilience despite global challenges involving tariffs, geopolitical uncertainties and pressure on global supply chains.
“The confidence shown by international investors in Penang, reflected in record levels of FDI, speaks volumes about the stability and competitiveness of our economy.
“Our commitment to high-quality investments, automation, digitalisation, and research will continue to ensure Penang’s position as an economic powerhouse in the region,” he added.
Chow also addressed a proposal raised by Joshua Woo Sze Zeng (PH-Pulau Tikus) to establish a Penang Development Bank, which he said aligns with the state’s efforts to foster growth in infrastructure, urban renewal, and tourism.
“It is also highly consistent with the proposed establishment of the Penang International Financial Centre (PIFC). However, we will carefully review the proposed model to assess its effectiveness and suitability,” he stated.
The Chief Minister outlined Penang’s positive fiscal position, noting that the state’s 2026 Budget provides RM1.08 billion for expenditure. Penang is on track to further narrow its budget deficit, with a projected RM19.92 million deficit for 2026, a marked improvement from RM33.63 million in 2025 and RM514.53 million in 2024.
“Our financial management practices have helped to significantly reduce the deficit, reflecting the state’s commitment to prudent fiscal policies and ensuring we record the lowest deficit in recent history. Based on the latest revenue collection figures and the revenue expected before the closing of the current financial year, it is likely the state will record a surplus,” Chow said.
He reiterated his pledge to strengthen the state’s Consolidated Revenue Account (CRA), committing to hand over his leadership with RM1 billion in reserves by the end of his second term.
As of 20 November 2025, Chow said the state government had recorded revenue collection of RM927.63 million. This amount surpasses the 2025 target of RM906.59 million, placing the state on the right trajectory to increase the accumulated balance of the CRA. With this latest development, the projected deficit for early 2025 — initially estimated at RM33.63 million — has now been reduced to RM12.59 million.
“This performance demonstrates that the state government is actively working to rebuild the CRA balance through strategies to enhance state revenue while maintaining prudent expenditure.”
A significant portion of the state’s revenue strategy involves land-related measures. Penang plans to increase land and assessment taxes, review transaction fees, and introduce new land auction guidelines. These measures are expected to boost revenue substantially over the next five years.
The Land and Mines Office (PTG) aims to raise land and assessment tax revenue from the current RM140–145 million annually to RM300–350 million between 2026 and 2030.
“Our revenue strategies are focused on long-term growth. The increased collection from land taxes and non-tax sources will help ensure we have the financial resources to support our vision for Penang,” Chow explained.
In 2025, Penang’s international presence was strengthened through 22 official overseas visits by state executive councillors. These visits resulted in several MoUs and potential investments, including a notable RM426 million investment from global companies like FedEx and DHL.
Chow stressed that these engagements are vital to building international partnerships that strengthen Penang’s economic resilience and global positioning.
Looking ahead, he revealed that Penang is exploring additional revenue streams, including potential non-radioactive rare earth element (NR-REE) deposits. Regulatory frameworks are being prepared to support responsible exploration and development.
“The NR-REE resources present a significant opportunity for Penang, and we are committed to ensuring that exploration and development are conducted responsibly and in line with our long-term sustainability goals.”
Chow also emphasised the role of the Penang Development Corporation (PDC) in driving key development projects, including the World City @ Linear Waterfront reclamation initiative, which is expected to generate RM1.31 billion in revenue.
In closing, Chow reaffirmed the state government’s commitment to the Penang2030 Vision, which focuses on creating ‘A Family Focused, Green, and Smart State that Inspires the Nation’. He emphasised the importance of aligning the state’s development with the aspirations of Malaysia Madani, ensuring that economic progress contributes to the well-being of all Penangites.
“Penang’s future is bright, and with the continued support of the people, we will ensure that our state remains at the forefront of Malaysia’s economic and social development,” he said.
Story by K.H. Ong