KUALA LUMPUR – Malaysia aims to maintain the spending level set by the previous government for 2023 while keeping an eye on existing fiscal consolidation targets, according to Economic Minister Rafizi Ramli.
At the same time, the government is looking into expediting “high impact projects” in the revised 2023 spending plan that’s set to be presented to parliament on Feb 24, Mr Rafizi said at a briefing in the administrative capital of Putrajaya on Thursday.
These include projects related to food security and value chain as well as renewable energy and green technology, he said.
The economy ministry is also trying to get more resources allocated to upskill the workforce to better meet the demands of the industry.
“What we are trying to balance now is how to stay on course with the amount that we have, mindful of the deficit consolidation that we have to achieve down the line,” said Mr Rafizi. According to the 12th Malaysia plan, the country aims to narrow its fiscal deficit to 3.5 per cent by 2025.
The previous administration led by Ismail Sabri Yaakob had in October presented a tighter budget for 2023 with a view to narrowing the government’s funding shortfall.
Parliament was dissolved before lawmakers could approve that spending plan, placing the onus on Prime Minister Anwar Ibrahim, who doubles as finance minister, to present a fresh budget in line with his coalition government’s aspirations.
Mr Rafizi said the government is finalising data on the impact that the expected global economic slowdown would have on Malaysia’s gross domestic product ahead of the budget presentation.
The previous administration forecast GDP to expand between 4 per cent and 5 per cent in 2023, slower than the 6.5 per cent to 7 per cent expected for 2022.
The government isn’t likely to make “drastic revisions” to this year’s GDP forecast, even as it expects the economy to have performed better than expected in 2022, according to Mr Rafizi.
“We do have some breathing space hopefully to navigate this expected global recession without going through a recession,” said Mr Rafizi. “But I think what we want to focus on is with that ‘some breathing space’ that we have, how to maximise it knowing full well that it will be challenging.” BLOOMBERG
