Malaysia set deficit target higher at 3.2 pct to boost economy

0 Comment(s)Print E-mail Xinhua, October 11, 2019
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KUALA LUMPUR, Oct. 11 (Xinhua) -- Malaysia set its deficit target next year to 3.2 percent of its gross domestic product (GDP), as it will allocate an additional injection of 0.2 percent of its GDP to boost the economy, according to its fiscal outlook report revealed Friday.

The deficit target was slightly higher than the previous 3 percent announced last year, due to the government's decision to strengthen domestic economic activities as pre-emptive measures to provide immediate support and sustain the growth momentum in light of slower global growth forecast, Malaysian Finance Ministry said in the report.

According to the report, the allocation will be done through development expenditure to revitalize public investment, which will be mainly channeled to accelerate the implementation of infrastructure projects.

Overall, the government's revenue is expected to decline 7.1 percent year-on-year to 244.5 billion ringgit (about 58.42 billion U.S. dollars) in 2020. Total expenditure is also forecast to be lower at 297 billion ringgit, of which operating expenditure and development expenditure stood at 241 billion ringgit and 56 billion ringgit, respectively.

As for 2019, the government's fiscal deficit is expected to remain at 3.4 percent of GDP as originally targeted.

The government's total revenue this year is expected to increase 1.5 billion ringgit to 263.3 billion ringgit compared to its original estimates. Its total expenditure is also projected to rise 1.4 billion ringgit to 316 billion ringgit, as compared to earlier estimates.

It is also noted that public sector debt as of June increased to 1.1 trillion ringgit or 76.2 percent of GDP due to higher government debt to finance the fiscal deficit. The external debt also rose to 931.1 billion ringgit or 61.3 percent of GDP.

However, the government emphasized that it remained on a consolidation path, as the fiscal deficit is anticipated to reduce further to an average of 2.8 percent in the medium term (2020 to 2022).

It also announced several reform initiatives to strengthen its fiscal administration to reinforce the government's commitment to strengthening public finances through enhancement of fiscal discipline, spending effectiveness and transparency. Enditem

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