KUALA LUMPUR, Oct 21 — Focus on small and medium enterprises (SMES), the backbone of the country’s economy, fiscal prudence and at the same time supporting growth are among the key points of Budget 2017, say bankers.

CIMB Group Group Chief Executive Tengku Datuk Seri Zafrul Aziz said the bank was confident the proposed measures in the 2017 Budget would achieve the fiscal deficit target of three per cent of Gross Domestic Product (GDP) for 2017.

In 2016, the fiscal deficit is set to be reduced to 3.1 per cent.

"It will go a long way towards supporting domestic demand and the peoples’ short- and long-term interests, as well as, in meeting the development targets set out in the 11th Malaysia Plan (2016–2020),” he said in a statement today.

The reduction in fiscal deficit should alleviate any lingering concerns on fiscal policy credibility and the country’s finance, said Malayan Banking Bhd Chief Executive Officer Datuk Abdul Farid Alias.

The target would also sustain Malaysia’s investment-grade sovereign credit ratings; and mitigate any pressure on key macroeconomic variables like market interest rates and the exchange rate. 

"We are very happy to see that the government remains focused on fiscal discipline and consolidation,” he added. 

Abdul Farid said the bank anticipated to see a rate of growth that was sustainable over the long-term despite the challenging external environment.

"It is our hope that we remain vigilant over the possible higher volatility in the global markets as central bankers around the world will start re-introducing risks into the financial markets,” he added.  

Meanwhile, Standard Chartered Bank Malaysia Bhd Managing Director and Chief Executive Officer Mahendra Gursahani said maintaining fiscal discipline in the face of rising operating expenditure and challenging revenue outlook was commendable.   

"This will ensure that the country remains a favourable investment destination for foreign investors,” he added.

Prudent fiscal spending together with an expected increase in government revenue would enable Malaysia to remain on track to achieve a near balanced budget as the economy progressed into a high-income nation by 2020, said Public Bank Bhd. 

Despite being mindful of the fiscal deficit, Tengku Zafrul of CIMB said continued capital expenditure on necessary infrastructure projects like improving public transport and road networks, particularly in Sabah and Sarawak and rural areas, is evidence of the long-term view to provide the right ecosystem to support future economic growth.

Mahendra said measures tailored for various groups such as B40, M40 and first time house buyers would certainly ease the burden of high cost of living amid the slowing global economy.

He said domestic consumption and private investments were needed to support GDP growth.

"Hence, we are encouraged to see the pro-business strategies announced in Budget 2017. 

"We are also pleased to see that small and mid-cap companies are also given attention in this budget, opening up participation in the capital markets to more players,” he added. 

Mahendra said the RM2.1 billion allocation to the five economic corridors was positive for financial services as the bank supported and participated in Malaysia’s infrastructure development.

Meanwhile, Tengku Zafrul added that CIMB Bank was pleased to have been selected as one of the four Malaysian banks to provide PR1MA end-financing to the lower income group for the purchase of houses valued between RM150,000 and RM300,000.

"With these initiatives, the Malaysian government is clearly taking a long-term view of helping the rakyat with their lifelong financial planning,” he added.

Maybank also announced that it will be allocating a facility of up to RM2.0 billion to end finance PR1MA homebuyers eligible under the scheme. 

The bank is also part of the new special "step up” end-financing scheme for the PR1MA housing programme in collaboration with the government.

Khairussaleh said the affordable house ownership scheme announced by the government through PR1MA will enhance the eligibility of the population to own a house.

"RHB is honoured to be able to be involved in this scheme,” he added. — Bernama