KUALA LUMPUR, Oct 30 — Prime Minister Datuk Seri Najib Razak tabled a Budget 2018 that was financially responsible notwithstanding the general election he must face no later than next year, said BMI Research today.
In its note on the Budget tabled in Parliament on Friday, the research house noted that Putrajaya resisted the urge abandon responsible spending in a bid to shore up support for the 14th general election.
“Malaysia's 2018 budget is a broad-based one that largely succeeds in striking a balance between remaining on the path of fiscal consolidation while preparing the ground for general election that must be held by August 2018.
“We believe that strong economic growth will help the government achieve its goals, while the targeted nature of spending will ensure that expenditure remains capped and we forecast the fiscal deficit to come in at 2.8 per cent of GDP in 2018 (from 3.0 per cent of GDP in 2017),” it said in its report.
BMI also adjudged Najib as having met the theme of his Budget, “Prospering An Inclusive Economy, Balancing Between Worldly And Hereafter, For The Wellbeing Of Rakyat, Towards TN50 Aspiration”, with his proposals.
Key constituents in rural areas and Felda settlers were benefactors of proposed measures in the Budget, with BMI saying this would blunt efforts by Parti Pribumi Bersatu Malaysia to woo voters from Umno's traditional support bases.
The ruling Barisan Nasional government also made a conscious effort to prepare Malaysia for Industry 4.0 and remained committed to ensuring the country's long-term economic progress, it added.
“Overall, we view the government's announced budget as an effort to strike a balance between maintaining fiscal discipline and addressing its immediate political needs.
“The targeted nature of its expenditures and efforts to increase revenue suggest that the government remains committed to getting its finances back in order,” BMI concluded.
Najib tabled the largest ever Budget in Malaysian history on Friday, proposing to spend RM280 billion next year.
Despite the size of the expenditure, the spending plan projects that the national deficit would drop below 3 per cent.
