Govt should not rush into achieving balanced budget

KUALA LUMPUR: The government should take its time in the pursuit to achieve a balanced budget by 2020, said Maybank Investment Bank Bhd Group Chief Economist Suhaimi Ilias.

He said current efforts to reduce the budget deficit was already very good, and if the government managed to achieve the target, it should be due to great economic and revenue growth.

“Achieving a balanced budget in 2020 requires the government to deliver a big deduction in the 2019 and 2020 budget deficit, and that could potentially affect the economy.

“Will the government reduce its spending, stop the 1Malaysia People’s Aid (BR1M) programme, downsize the civil service, raise income tax or Goods and Services Tax (GST)?

“These are things which need to be considered when we talk about a balanced budget,” he said at Maybank’s Global Markets Economic Outlook 2018 yesterday.

During the recent 2018 Budget presentation, the government reaffirmed its commitment to further consolidate its fiscal deficit towards achieving a nearbalanced budget in 2020.

The government aims to further reduce fiscal deficit to 2.8 per cent (RM39.8 billion) of gross domestic product (GDP) in 2018 from the 3.0 per cent (RM39.9 billion) in 2017.

On global market economic outlook, Suhaimi said the bank was of the view that the current global growth momentum would remain sustainable until next year, led by the synchronised expansion in G3 (the United States, Eurozone and Japan) economies. - Bernama