Fiscal deficit of 3.2 pct of GDP projected in 2020

The government expects the 2020 fiscal deficit to be at 3.2 percent of gross domestic product (GDP), slightly higher than the 3.0 percent originally announced in the 2019 Budget.

This is due to a strategic decision to strengthen the domestic economy as pre-emptive measures to provide immediate support and sustain the growth momentum in light of slower global growth forecast.

Given the pre-emptive measures, the overall deficit in 2020 is expected to be lower versus 3.4 percent in 2019 with fiscal consolidation remaining on its trajectory and the debt position at a manageable level.

In its Fiscal Outlook and Federal Government Revenue Estimates 2020 report released today, the Finance Ministry (MoF) said the federal government revenue is expected to register RM244.5 billion or 15.2 percent of GDP in 2020.

The collection in tax revenue is higher at RM189.9 billion, while non-tax revenue is at RM54.6 billion.

The government’s pre-emptive measures involve the additional injection of 0.2 percent of GDP through development expenditure to revitalise public investment via capital formation in strengthening the long-term potential of the economy.

The allocation will be mainly channelled to accelerate the implementation of the impactful transportation and connectivity projects such as the construction of the Pan Borneo Highway, Mass Rapid Transit 2 and Gemas-Johor Bahru Electrified Double Track Project.

Small-scale developmental projects such as the upgrading of dilapidated schools, clinics, water treatment plant and sewerage facilities, as well as suburban broadband infrastructure, will also be implemented.

These projects are expected to generate high-multiplier impacts on the economy towards achieving inclusive development.

In addition, an allocation is provided for the implementation of the rationalisation plan of the Federal Land Development Authority (Felda) and Lembaga Tabung Haji, as well as higher debt servicing commitment for SRC International Sdn Bhd.

The government will also focus on programmes which create more employment opportunities and income generation, thus improving the well-being of the people.

- Bernama