Budget 2015 Revision: Government has to be realistic - Chief Economist

Narrowing the fiscal deficit to three percent of gross domestic product (GDP) in 2015 by Prime Minister Datuk Seri Najib Razak heading towards a balanced budget by 2020 will be an uphill task.

Chief Economist, Maybank Investment Bank, Suhaimi Ilias said the measures carried out by the government will have to be realistic as the reduction of deficit to three percent GDP is a “challenging” one.

When asked about the new forms of interventions that the government would introduce in its newly-revised Budget 2015, the chief economist said, though he is not entirely sure, the new interventions would be in the form of “some adjustments or revisions in government spending,”

"The new budget would have to make sure the budget deficit is addressed and to help stabilise the economic downturn especially in revenue generating areas," he said

As he is looking forward to see which developmental projects would be affected, in terms of budget cuts, he is quite sure that the Mass Rapid Transit (MRT) projects would not be affected as they are “critical projects” undertaken by the government.

According to The Star Online, Malaysia narrowed the fiscal deficit to 3.9 percent of GDP in 2013, and Prime Minister Datuk Seri Najib Tun Razak wanted to further trim the gap to 3.5 percent in 2014 and 3 percent in 2015, heading towards a balanced budget by 2020.

The Malaysian economy has been hit with recent global economic uncertainties.

The depreciating ringgit value and drop in oil prices have set the alarm bells ringing and Najib is expected to announce the new revised Budget 2015 tomorrow amidst the changing global economic landscape.