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Update: Malaysia unveils prudent budget, aims to cut deficit
[KUALA LUMPUR] Malaysia's Prime Minister Najib Razak avoided broad populist measures in his budget announcement on Friday, reassuring markets by pledging to cut the country's large fiscal deficit and debt burden.
Mr Najib said the total budget for 2017 would be RM260.8 billion (S$86.8 billion), up 3.4 per cent from the previous year. He added that the good and services tax (GST) would not be raised.
"We are now on the right track, as we have and are taking firm, bold and right decisions despite the measures being unpopular," the prime minister said in parliament.
"We have laid strong foundations for the country's long-term financial and economic position."
South-east Asia's second-largest oil producer and the world's second-largest exporter of liquefied natural gas was left reeling from the slump in global crude prices late last year, forcing it to slash its 2016 budget in January and lower its growth target to 4-4.5 per cent.
Mr Najib, however, said the outlook was improving and expects growth to pick up marginally in 2017 to 4-5 per cent and the budget deficit to be 3 per cent of GDP from a target of 3.1 per cent this year.