With Malaysia’s national debt at RM1.5t, it cannot be business as usual, says Anwar
MALAYSIA is looking to expedite its priority projects while plugging leakages in its review of Budget 2023 amid rising sovereign debt levels, said Prime Minister Anwar Ibrahim.
The government will prioritise ramping up the nation’s participation in technology and the green economy, he said at a budget dialogue held in the administrative capital of Putrajaya on Tuesday (Jan 17). It will also focus on boosting small and medium-sized enterprises, even as it maintains fiscal discipline.
Debt and liabilities are at about RM1.5 trillion (S$459.5 billion) currently, with the budget deficit at about 5.8 per cent of gross domestic product in 2022. This year’s fiscal position will not be comfortable, he said.
“The government must accept this fact. It cannot be business as usual, we cannot be content,” he said, adding that the maximum debt service is already approaching a level that is more than what the country can manage.
Anwar, who doubles as finance minister, is set to table the revised 2023 budget to Parliament on Feb 24 against the backdrop of lingering price pressures at home and increasing risks to the global economy. A reformist who heads a multiracial coalition, Anwar has made protecting low- and middle-income groups from rising prices the top priority of his administration.
The previous government under former prime minister Ismail Sabri Yaakob presented a tighter budget for 2023 last October as they sought to narrow the fiscal deficit. Just days later, however, Parliament was dissolved for the general election before lawmakers could approve that spending plan, requiring Anwar to present a fresh budget that supports his coalition government’s aspirations.
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The government saw about RM4 billion in leakages from a flood project alone and could save about RM10 billion in the procurement system, Anwar said while ordering agencies to speed up public works approvals.
Anwar said his government will retain the ideal items in the budget but will make necessary changes to some to reflect voters’ wishes. Malaysia is expediting the distribution this quarter of RM1.67 billion in cash aid to the poor, he said on Monday.
The government is unlikely to make “drastic revisions” to this year’s growth forecast as it finalises data ahead of the budget presentation, Economy Minister Rafizi Ramli said last week.
Malaysia’s economic growth is projected to slow to between 4 per cent and 5 per cent in 2023, from an estimate of more than 7 per cent for last year, the central bank had said. BLOOMBERG
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