MIDF: Budget well-constructed

KUALA LUMPUR: The 2017 Budget is well-constructed, taking cognisant of the need to balance between the country’s aspirations to achieve a high-income nation status and the 11th Malaysia Plan’s commitment towards economic growth, anchored on the principle of inclusivity, equity, wellbeing and sustainability.

MIDF group managing director Datuk Mohd Najib Abdullah said the 2017 Budget offered an optimal mix of stimulus, incentives and safeguards required to navigate what is expected to be another challenging year ahead.

“MIDF group is of the view that the government’s gross domestic product growth forecast of four to five per cent this year is attainable amid the challenges posed, among others, by weak global demand, volatile international monetary landscape, China’s economic slowdown and depressed commodity prices.

“Barring a global calamity in economic activity, Malaysia should be on track to attain a high-income economy status by 2020. The current account is also expected to stay in surplus and not deteriorate next year — that should quell some concerns in the financial markets,” he said in a response to the budget announcement yesterday.

Mohd Najib added the government’s commitment towards fiscal probity by budgeting a deficit equivalent to three per cent of gross domestic product (GDP) next year should be commended. “Keeping the fiscal gap under control is a necessary stabiliser for the ringgit and should be positively welcomed by the markets.

“More importantly, the incidence of public debt has been forecast to dip below 53 per cent of GDP for the first time in five years. If attained, that would be an important progress in the government’s effort to increase its financial resilience.

“In its full year of implementation, the Goods and Services Tax (GST) has proven to be an important saviour of the government’s finance amid a severe loss of petroleum-related income. The government is much less financially vulnerable now to significant downswing in crude oil price,” he added.

Mohd Najib says the 2017 Budget was prudent and proactive, and the various measures announced would help the country buffer the external headwinds next year while continuing to enhance Malaysia’s longterm fundamentals.