KUALA LUMPUR, Oct 15 — Projections of economic growth within Pakatan Harapan’s Budget 2020 was played down by former prime minister Datuk Seri Najib Razak, who said policies and the direction of the budget would result in Malaysia losing its competitive edge in the global economic arena.
In his address debating the Budget in Dewan Rakyat today, Najib took aim at the projected 4.8 per cent economic growth mentioned by Finance Minister Lim Guan Eng when tabling the Supply Bill (Budget) 2020 last Friday.
Najib claimed the rate was far higher than figures projected by economists, international credit rating companies, the International Monetary Fund and even the World Bank, who projected only a 4.3 per cent growth rate.
“No one else is saying the growth rate for next year will exceed this year’s rate; the PH government are the only ones who are saying this.
“Should the government be employing a 4.8 per cent growth rate?
“Will the country’s deficit be far more than what was projected for next year, which is 3.2 per cent, if the assumptions are wrong and government revenues be affected?,” he asked when reading out his speech.
Najib said the Budget left the federal government with less room to maneuver should an economic crisis take place, saying Pakatan’s projected fiscal deficit made it harder for them to introduce any stimulus packages should the need arise.
He claimed a trend of high federal deficit projections was synonymous with the PH regime, questioning if their plans to reduce the federal debt would ever materialise.
“In 2018, the federal deficit was at RM54.2 billion, for 2019 it was projected to be at RM52.4 billion and a deficit value of 3.2 per cent for next year translates to a deficit of RM52.5 billion,” he said.
Najib said this meant federal debt would be at RM850 billion next year, where if a similar debt trend continues for the next three years at a rate of more than RM50 billion added on each year, the federal debt would reach the RM1 trillion mark in 2023, at the end of Pakatan’s term.
He warned that such a trend would also affect the debt to Gross Domestic Product (GDP) ratio, which was at 48.7 per cent in the first quarter of 2018, to increase caused by a high deficit value.
“It has to be noted the government had set a ceiling of 55 per cent debt ratio and they will not be allowed to borrow more once this limit has been reached.
“This shows the space for the government to introduce a stimulus package should there be an economic crisis is very limited.
“My worry is the nation’s deficit is not decreased,” he said.
Najib also pointed to the stock market’s negative performance since GE14, saying the local markets have since dropped 350 trading points from almost 1,900 points, resulting in losses in the region of RM300 billion.
“We are the worst in the world, far behind other neighbouring countries.
“In fact, stock markets in countries such as Zimbabwe and Venezuela are performing better than Malaysia for 2019,” he added.