Govt fore­casts slightly bet­ter GDP growth in 2019 — Min­istry

The Borneo Post - - HOME - — Ber­nama

KUALA LUMPUR: The gov­ern­ment is pro­ject­ing a slightly bet­ter gross do­mes­tic prod­uct (GDP) growth of 4.9 per cent in 2019 from the 2018 out­look of 4.8 per cent, said the Min­istry of Fi­nance (MoF).

Its Na­tional Bud­get Of­fice di­rec­tor, Jo­han Mah­mood Mer­i­can said the min­istry held onto its fore­cast even though some com­men­ta­tors be­lieved that the sit­u­a­tion would fur­ther weaken when com­par­ing the 2018 and 2019 fore­casts.

The for­mer Ta­lent Cor­po­ra­tion Malaysia chief ex­ec­u­tive of­fi­cer said Malaysia recorded a GDP growth of 5.9 per cent in 2017, while this year was a bit of a moder­a­tion.

“What is im­por­tant for the Malaysian pub­lic to un­der­stand, this is a re­flec­tion of the global eco­nomic out­look where in­ter­na­tional bod­ies, in­clud­ing the In­ter­na­tional Mon­e­tary Fund, have been re­vis­ing down­wards their growth out­look.

“This is partly the re­sult of one of the key driv­ers which is the US-China trade war and Malaysia, be­ing an open trad­ing econ­omy, is af­fected by this on­go­ing trade war, po­ten­tially may even worsen.

“We be­lieve the strate­gies, out­lined by the MoF, par­tic­u­larly those to en­sure that there are still growth be­ing stim­u­lated through bet­ter pub­lic-pri­vate part­ner­ships.

“We be­lieve there are enough mea­sures and strate­gies by the gov­ern­ment to en­sure that we are able to sus­tain or be slightly bet­ter for 2018 growth fore­cast,” he told Ber­nama.

On deficit, Jo­han said in 2017 Malaysia recorded a deficit of 3.0 per cent, and as an­nounced by Fi­nance Min­is­ter Lim Guan Eng, it in­creased to 3.7 per cent this year, and the gov­ern­ment planned to re­duce it to 3.4 per cent in 2019 and three per cent in 2020.

“On one hand, we have this com­mit­ment by the gov­ern­ment on fis­cal con­sol­i­da­tion of the re­duc­tion of 3.4 per cent to three per cent, but at the same time this is viewed by the new gov­ern­ment as a pe­riod of tran­si­tion,” said Jo­han.

He said the higher deficit com­pared to last year’s, which was partly a re­flec­tion that the pre­vi­ously an­nounced deficit, was not a re­flec­tion of the true sit­u­a­tion, given reliance of bal­ance sheet ex­pen­di­ture which re­sulted in the more than RM1 tril­lion debt.

Jo­han said Prime Min­is­ter Tun Dr Ma­hathir Mo­hamad was com­mit­ted to see­ing the need to re­dress this sit­u­a­tion of ex­ces­sive debt, hence, this was the gov­ern­ment strat­egy ar­tic­u­lated in the 2019 Bud­get to re­ally see what it could do to re­duce the debt level.

“The pro­jected 2018 op­er­at­ing ex­pen­di­ture is about RM235.5 bil­lion, whereas in 2019 we’re pro­ject­ing RM259.8 bil­lion. Although it may seem ex­pan­sion­ary, it is not.

“It looks as though it’s an in­crease but the gov­ern­ment’s fo­cus is for fis­cal con­sol­i­da­tion,” he said.

Jo­han said the sit­u­a­tion arose be­cause in 2019 the gov­ern­ment de­cided to give a one-off re­pay­ment of goods and ser­vices tax and in­come tax re­funds as th­ese funds were ac­cu­mu­lated from the pre­vi­ous ad­min­is­tra­tion that was never re­paid to busi­nesses.

“It’s a mo­ral im­per­a­tive by the gov­ern­ment to pay money that isn’t ours, that’s why you have this one-off item in 2019.

“If you take out that el­e­ment you will see a nett re­duc­tion in our op­er­at­ing ex­pen­di­ture of al­most RM9 bil­lion. That’s re­ally the crux of the con­sol­i­da­tion ef­fort, that’s ac­tu­ally, once the re­fund item is taken off, it’s a re­duc­tion in ex­pen­di­ture,” he said.

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