Call for right­siz­ing to cut debt level

New Straits Times - - Business -

KUALA LUMPUR: There is an ur­gent need to right­size the public sec­tor as rapidly ex­pand­ing op­er­at­ing ex­pen­di­ture con­tin­ues to sup­press de­vel­op­ment ex­pen­di­ture, caus­ing a rise in debt level and debt ser­vic­ing cost, said econ­o­mists.

Sun­way Uni­ver­sity Busi­ness School eco­nomics pro­fes­sor Dr Yeah Kim Leng said there was a rise in gov­ern­ment op­er­at­ing ex­pen­di­ture re­lated to the ex­pand­ing size of the civil ser­vice.

“I think we have to match the in­creased salary with pro­duc­tiv­ity for the civil ser­vice and, at the same time, in­crease their pro­duc­tiv­ity so the gov­ern­ment does not need to ex­pand the size of the civil ser­vice,” he said on the side­lines of a panel dis­cus­sion on the Malaysian econ­omy, here, yes­ter­day.

RHB Re­search In­sti­tute chief econ­o­mist Lim Chee Sing said based on the bud­get this year, the gov­ern­ment pro­jected that 97.8 per cent of rev­enue would still be used for op­er­at­ing ex­pen­di­ture.

He said with a small por­tion dis­bursed for de­vel­op­ment ex­pen­di­ture, the coun­try needed to in­crease its bor­row­ings, which would in­crease its debt level and debt ser­vic­ing cost.

Mean­while, Bank Ne­gara deputy gov­er­nor Shaik Ab­dul Rasheed Ab­dul Ghaf­four said macroe­co­nomic fun­da­men­tals re­mained sup­port­ive of growth with di­ver­si­fied sources of growth, ex­port mar­kets, sta­ble labour mar­ket con­di­tions, cur­rent ac­count sur­plus and strong fi­nan­cial buf­fers. Farah Adilla

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