Budget 2018 to tackle rising cost of living
KUALA LUMPUR: OCBC Bank expects Budget 2018 to address the rising cost of living through various targeted incentives for middle-low income groups through the 1Malaysia People’s Aid (BR1M) programme.
Other social policies could also revolve around the budget’s theme, “Shaping the Future”, which would likely concentrate on education and training, improving healthcare standards and affordable housing, the bank’s economist Barnabas Gan said in a note on the pre-budget outlook yesterday. Gan said the government may also emphasise on economic development through technologies such as robotics and cloud computing to encourage the growth of digital economy and provide the right environment for improved productivity. “In order to finance the higher expenditure, we foresee the government to record higher Goods and Services Tax (GST) collection of up to RM47.6 billion from 2017’s estimate of RM47.1 billion.
“Elsewhere, higher corporate and income tax revenue may also be expected in line with a relatively benign economic environment into 2018,” he said.
The OCBC Bank economist estimated that Malaysia was on track to achieving its target of -3.0 per cent budget balance as a percentage of gross domestic product (GDP) in 2017.
“The narrowing budget deficit is seen on the back of higher revenue, led by GST receipts of +14.4 per cent year-on-year (y-o-y) as well as higher export duties (+29.1 per cent y-o-y),” he said. The higher revenue would be able to cushion the relatively higher expenditure (operating: +2.7 per cent, development: +7.9 per cent).
“All-in-all, we expect Malaysia to project a budget deficit of 2.9 per cent of GDP in 2018, from an estimated of 3.0 per cent in 2017,” Gan added. — Bernama
In order to finance the higher expenditure, we foresee the government to record higher Goods and Services Tax (GST) collection of up to RM47.6 billion from 2017’s estimate of RM47.1 billion. Barnabas Gan, OCBC Bank economist