The 2017 Budget will focus on tackling the cost of living, especially regarding housing, food and transportation while at the same time spurring economic growth, Ministry of Finance deputy secretary-general (policy) Siti Zauyah Md Desa said.
“The budget will have a sharp focus on the cost of living, and definitely we are not going to leave out corporate matters and investment in order to activate the economy.
“The global economy is slowing down, and we are very concerned,” she told reporters after opening the 3rd National Financial Planning Tournament at Universiti Putra Malaysia organised by the Malaysian Financial Planning Council here today.
Siti Zauyah described Malaysia as a lucky country whose economic fundamentals remain strong despite the deteriorating international conditions.
“Although people keep saying that we are highly indebted, actually we are not.
“We are a country with one of the lowest debt to Gross Domestic Product (GDP) ratios,” she said.
Earlier, she said, the ministry had conducted many Focus Group meetings with various stakeholders to discuss issues and recommendations for the 2017 Budget, which is expected to be tabled in Parliament on Oct 21.
“We did engagement sessions with stakeholders to get a sense of their concerns for the upcoming budget.
“Of course, we can’t take everything on board and some of the requests are beyond the scope of the government’s responsibility to fulfill,” she said.
Asked how the ministry will improve access to financing, Siti Zauyah said: “Just wait for the announcement. Bank Negara Malaysia has done good things and has been very proactive. The reduction of the Overnight Policy Rate by 25 basis points in July was a good start.”
The recent World Economic Forum’s Global Competitiveness Report noted Malaysia declined from a score of 4.8 to 4.7 for ease of access to loans, slipping to 25th in the world from second previously.
On the GDP projection next year, she said the government’s forecast is in line with that of the International Monetary Fund (IMF).
In fact, the ministry makes use of IMF’s forecast as a guide for the medium-term fiscal framework, Siti Zauyah said, adding that the domestic and neighbouring countries’ economic landscape must also be considered.
“Currently, only Southeast Asia is doing well compared to other parts of the world. Luckily, we are here.
“Our neighbouring countries’ economies are starting to perform well, and this really helps us as well.
“The latest trade figures are a very good sign. At one point, analysts said our trade was going down, but we are still receiving orders from overseas,” she said.
Malaysia’s exports in August 2016 hit an eight-month high of RM67.58 billion, up 1.5 per cent from July’s exports of RM59.8 billion.
In another development, Siti Zauyah said the ministry has adopted a more conservative approach with regards to oil price forecasts when formulating the 2017 Budget.
“We have to be a bit conservative to ensure our budget is prudent and not too optimistic,” she said.
On whether the allocation for ministries will be slashed, she said: “No. It will depend on the revenue of the government.
“It will also depend on how we want to address issues that require a boost from the government to activate the economy.”
Meanwhile, Siti Zauyah stressed the ministry will review the country’s economic performance as well as the expected economic growth when deciding on a bonus for civil servants.
“Let’s look at how our economy is performing by the end of the year.
“That will give an indication of how the world economy is going to perform next year,” she said, adding that Malaysia’s open economy means that the country would be affected by whatever happens globally.