Govt needs to cut spending amid fiscal squeeze

KUALA LUMPUR: The government’s spending will not be huge in the current situation as it addresses the fiscal squeeze before stabilising and moving ahead, said Asean Business Club president Tan Sri Munir Majid.

This, he said, was due to among others, the escalating US-China trade war, which have pulled down the growth of the world economy, particularly with Malaysia being an export-oriented country.

“We have to accept the fact that government spending will not be huge (for economic development) and we are looking at a 4.5% growth in the gross domestic product,” he said on the sidelines of the CIMB Asean Research Institute (CARI) and Asean Business Club’s briefing on progress, priorities and challenges of the Asean Economic Community here yesterday.

However, he said, what the country should also do is to think about the fiscal responsibility to be carried out in terms of managing the deficit. Munir, who is also CARI chairman, said the government needed to manage its finances, while discovering that what was previously recorded as the country’s deficit may not be the real deficit number.

“For example, if you overstate your revenue, obviously your deficit will be lower... and for the private sector, if this scenario happens, we would have an adjustment period whereby you need to make an adjustment to your account. — Bernama