Malaysia's budget tweaks rooted in harsh reality

MALAYSIA has moved to soften the sting of slumping oil prices and a battered currency amid a less rosy global economic backdrop by making credible revisions to its 2015 budget, just three months after it was tabled.

It raised the country's fiscal deficit projections for 2015 by 0.2 percentage point to 3.2 per cent of GDP; this is somewhat easier to stomach as it's lower than the previous year's expected deficit of 3.5 per cent.

Higher fiscal deficits ordinarily provoke scowls but it would have been harder to forgive had Malaysian policymakers stuck adamantly to last October's unrealistic projections crunched up during easier times. This, more so as the oil-reliant government coffers would have suffered a shortfall of some RM14 billion (S$5.2 billion) on hammered oil prices, which would have shoved the deficit situation higher to 3.9 per cent.