Budget 2020 will reduce income gap, says MIDF

People watch the Budget 2020 speech by Finance Minister Lim Guan Eng ‘live’ at a restaurant in Medan Selera Medan Kidd in Ipoh October 11, 2019. — Picture by Farhan Najib
People watch the Budget 2020 speech by Finance Minister Lim Guan Eng ‘live’ at a restaurant in Medan Selera Medan Kidd in Ipoh October 11, 2019. — Picture by Farhan Najib

KUALA LUMPUR, Oct 12 — Initiatives to improve the wellbeing of Malaysians and those from the Bottom 40 (B40) group announced in the Budget 2020 will help to reduce the income gap between the wealthy and the less well-off, said MIDF Research.

These measures it said, includes a targeted approach for petrol subsidies and expanding the number of Bantuan Sara Hidup recipients as well as measures to make housing more affordable for the rakyat.

“Budget 2020 reflects the government’s commitment to reduce income inequality between rural and urban areas by allocating the largest portion of development expenditure to Sabah and Sarawak which will be used to expanding coverage of basic infrastructure — water, electrification and roads,” it said in a statement today.

The research firm also noted that youth employment remains a challenge, despite the economy running at full employment.

Hence, it commended the government’s decision to give out hiring incentives to employers who hire unemployed graduates and giving wage incentives to graduates themselves.

MIDF also said steps taken to re-engineer economic growth with a focus on small and medium enterprises and Digital Economy, would drive the provision of high value and knowledge intensive activities.

These activities would contribute towards the creation of new job opportunities, especially in the manufacturing and services sector.

“Emphasis on increasing efficiency and productivity would be net positive to Malaysia’s economic growth, while at the same time reduce our dependence on foreign labour and increase the competitiveness of our products in the export market,” it said.

Meanwhile, the research firm said the government is optimistic the economy will remain buoyant.

The economy is expected to remain resilient next year and continue to perform at a moderate pace of around 4.5 per cent to 4.7 per cent due to less growth impetus from external sources.

“As for 2019, we maintain our forecast for the economy to grow by 4.9 per cent,” said MIDF Research. — Bernama

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