KUALA LUMPUR, Oct 12 — Malaysia’s economy will continue to grow only at a moderate pace of 4 to 4.5 per cent next year despite the government’s grand plan for equitable prosperity, the Opposition PAS claimed today.
Its economic and entrepreneur development deputy chairman Mazli Noor further claimed this is because Budget 2020 tabled by the ruling Pakatan Harapan (PH) in Parliament yesterday provides no new initiatives and did not spell out its transformative strategies towards that goal.
“Despite the public knowing about the government’s reduction in earnings with the introduction of SST (sales and service tax), this Budget did not provide new suggestions to increase government earnings.
“This goes against the experts’ analyses that Malaysia needs to re-evaluate the tax structure in order to reduce the fiscal gap,” he said in a statement.
He asked how the government planned to gain the additional RM20 billion required for its ambitious economic undertaking, saying it was not spelt out in yesterday’s Budget announcement.
“As such, we feel the government will not be able to hit their targeted fiscal deficit of 3.2 per cent for 2020 which is higher than Budget 2019’s target of 3 per cent,” he added.
Mazli noted the move to increase minimum wage for those working in cities to RM1,200 next year, but questioned its silence on how to increase the nation’s productivity.
He said this will cause inflation as the wages don’t match productivity.
He said Malaysia’s productivity growth plunged in 2018 to 2.2 per cent compared to 3.7 per cent in 2017, citing data from the 2018/2019 Malaysian Productivity Report.
Mazli also said overseas investments make up 30 per cent of trading in the stock market but claimed that investor confidence had not fully returned due to the government’s lack of economic strategies.
To support his argument, he cited MIDF Amanah Investment Bank Berhad research papers showing foreign investors selling their shares for 26 continuous weeks up to September 2019.
“There are no clear indicators as to how the government are regaining investors trust as due to a lack of strategies to improve the economy,” said Mazli.
“Confidence in the market is dependent on curbing corruption, which is still the main issue in Malaysia. This was also not touched upon in Budget 2020,” he added.
Mazli said based on the World Bank guidelines, leakages through corruption and money laundering affects up to 30 per cent of the GDP and thus new initiatives to fight corruption must be increased.
“Based on the Budget and the economic situation in Malaysia and the world we expect Malaysia’s economy to grow at a medium rate of 4 to 4.5 per cent for 2019 with the main contributors coming from domestic consumption and construction,” Mazli added.