Govt may review budget again if oil prices drop below US$25 per barrel - Husni

The government may conduct another revision of the 2016 Budget if oil prices were to fall below US$25 per barrel.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the government could not deceive itself and must always be realistic in determining national expenditure.

He said it was impossible for world oil prices to fall too low as major oil producing countries would not let a phenomenon that could affect their economies to happen.

"For oil prices were to drop further by US$5 per barrel is impossible as oil producers (countries) will definitely protect their financial position.

"If they let oil prices continue to fall, it would lead to negative effects on their economies. I believe they will take actions (to offset the situation)," he said at a special dialogue on the recalibrated 2016 Budget on Radio

Television Malaysia (RTM) here, on Tuesday.

The recalibrated 2016 Budget, which was presented by Prime Minister Datuk Seri Najib Tun Razak last Thursday, was based on world crude oil prices of between US$30 and US$35 per barrel.

Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar said the recalibrated budget could withstand if oil prices were to fall to US$25 per barrel.

Taking into account the estimated crude oil prices and the current economic scenario, the government has also revised the gross domestic product (GDP) this year to between 4.0 and 4.5 per cent.

Husni said the revised projection was realistic under the current economic circumstances and world crude oil prices, and very much similar to that of the International Monetary Fund (IMF) at 4.4 per cent.

"When we look into the two contexts (the government and IMF's forecast), it means the 4.0-4.5 per cent growth is logical.

"If we were to look back (in previous years), IMF made much lower (GDP) projections than that of ours, but we managed to achieve the forecast set, this means our level of expertise is rather high," he said.