KUALA LUMPUR: Malaysia is on track to achieve the fiscal deficit target of 3.1 per cent this year, said Second Finance Minister, Datuk Johari Abdul Ghani. He said the Ministry of Finance had had to make difficult decisions such as the Goods and Services Tax (GST) and subsidy rationalisations for the long-term benefit of the nation’s finances.
“These policies were certainly not populist in nature but were particularly necessary in order to keep our fiscal deficit on target,” he told reporters on the sidelines of the last day of the Khazanah Megatrends Forum 2016 here today.
Johari said these policies, which are to ensure the continued reduction of deficit for years to come, were difficult to implement especially given the challenging economic climate last year. The Ministry of Finance’s 2015/2016 Economic Report stated that Malaysia’s fiscal deficit is projected to decline to RM38.8 billion or 3.1 per cent of gross domestic product this year compared with 3.2 per cent in 2015.
It said the thrust of this year’s fiscal policy will continue to emphasise on fiscal consolidation by further reducing the fiscal deficit towards achieving a balanced budget by 2020. Asked whether there would be a reduction to the current GST rate of six per cent, Johari said this was unlikely as the tax system was just introduced less than two years ago.
“We want the system (GST) to be embedded into the entire consumer spending system,” he said. On plans to stimulate the country’s growth in the upcoming 2017 Budget, Johari said more than RM150 billion had been invested in the mass rapid transit, light rapid transit, high-speed rail, east coast rail link as well as Pan Borneo Highway.
“These infrastructure are used to stimulate the economy more,” he added. Themed “Geography as Destiny”, the two-day forum attracted more than 1,000 local and foreign participants.
