5% GDP growth target
> Figure achievable due to country’s strengths and improving global outlook, says Najib
PUTRAJAYA: Malaysia should strive to achieve a Gross Domestic Product (GDP) growth of 5% and above this year, said Prime Minister Datuk Seri Najib Abdul Razak.
In working towards this, Najib said the government has been responsible in managing its finances and commitment towards fiscal consolidation.
He pointed out that Malaysia is still a preferred investment destination due to its political stability, pro-business policies and sound banking system.
“Due to these strengths, as well as the improving global outlook, our economy is on track to register higher growth of 4.3% to 4.8% this year.
“We will try to do our best to achieve 5% and above,” Najib said at the 2018 Budget Consultation session at the Finance Ministry yesterday.
In stressing that the government has not been frivolous in its expenditure, he said it needs to be more vigilant and continue to create layers of buffers, promote long-term economic growth and boost exports, amid a narrowing current account surplus.
“We have resisted the temptation to spend more. Due to the upcoming elections, we are tempted to spend more but we have been a responsible government and we will continue with our commitment towards fiscal consolidation.
“Fiscal deficit is expected to reduce to 3% of the GDP this year. When I came into office in 2009, the fiscal deficit was 6.7%. So, we have been very responsible in reducing it gradually. If you do it overnight, then there will be severe repercussions in terms of the social cost to the people.
“We didn’t want that but we needed to bring down the deficit without inflicting too much pain on the people.”
He said the government, operating in a competitive global environment, needs to engage in higher value-added activities to retain comparative advantage.
“We have not taken an easy path but we believe that the road we have chosen is right because it will enable us to achieve a much more resilient economy, to weather any foreseeable external shocks to the economy.
“Even with the sharp drop in the price of oil, we in a way glided through it, to the extent that many people didn’t even realise that we were going through such difficulty.
“What we have done has been underappreciated as it could have been a lot worse had we not undertaken the reforms under the National Transformation Policy,” Najib said, adding that without the transformation plan, Malaysia would be in recession.
“In the first quarter of 2017, the economy grew by a sterling 5.6%. That took us by surprise, I almost fell off my chair when I was told that it is 5.6%,” he said.
The three-hour closed door budget dialogue was attended by representatives from various government agencies, industry players and non-governmental organisations.