Don’t worry over credit rat­ing down­grade — PM

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PETALING JAYA: Malaysia should not be wor­ried over any po­ten­tial down­grade in credit rat­ing due to the im­ple­men­ta­tion of the zero-rated Goods and Ser­vices Tax (GST), as the coun­try is set to profit from higher oil prices and lower govern­ment ex­pen­di­ture, Prime Min­is­ter Tun Dr Ma­hathir Mo­hamad said.

“( This) the ( 2018) bud­get was drawn up when the oil price was at US$ 52, ( but) now (at) US$ 70 per bar­rel, we stand to profit from this,” he told a press con­fer­ence af­ter chair­ing the Pakatan Hara­pan Pres­i­den­tial Coun­cil meet­ing here yes­ter­day.

Dr Ma­hathir said the off-set­ting revenue mech­a­nism had been taken into ac­count when the govern­ment de­cided to lower the GST rate from six per cent to a zero-rated tax.

He also said the fluc­tu­a­tions in oil prices, which would im­pact govern­ment revenue, had also been fac­tored in when de­cid­ing to rein­tro­duce the sub­si­dies for pe­tro­leum.

“Of course what we have de­cided is that there will be no more changes or fluc­tu­a­tions in the value of pe­tro­leum, which has been changed ev­ery week.

“This is de­struc­tive to busi­ness, both the buy­ers and sell­ers, so now the price will re­main static, but if we have to sub­sidise, then we will sub­sidise,” he added.

In­ter­na­tional rat­ing agencies – S& P Global Rat­ings, Moody’s

(This) the (2018) bud­get was drawn up when the oil price was at US$52, (but) now (at) US$70 per bar­rel, we stand to profit from this. Tun Dr Ma­hathir Mo­hamad, Prime Min­is­ter

In­vestors Ser­vice and Fitch Rat­ings – said the zero-rated GST would con­straint govern­ment in­come should there be no rev­enuerais­ing mea­sures.

Asked on the gross do­mes­tic prod­uct (GDP) growth out­look for this year, Dr Ma­hathir said the govern­ment had no pro­jec­tion at present, as it was still re­view­ing the per­ti­nent fig­ures that would de­ter­mine the real eco­nomic con­di­tion.

“Re­gard­ing the fig­ures and the coun­try’s fi­nan­cial position, I re­alise that many of the fig­ures are false.

“We need to de­ter­mine to what ex­tent they are not truth­ful ( be­fore mak­ing any pro­jec­tion),” he ex­plained.

In March, Bank Ne­gara Malaysia ( BNM) raised its fore­cast for Malaysia’s eco­nomic growth this year to 5.5- 6.0 per cent from 5.0- 5.5 per cent pre­vi­ously.

Last month, the World Bank sim­i­larly lifted its GDP growth fore­cast for the coun­try to 5.4 per cent from 5.2 per cent pre­vi­ously. — Ber­nama

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