Government's financial position to improve in 2023 - PM

KUALA LUMPUR: The government's financial position is expected to improve in 2023 with the strengthening of the economy after being hit by the COVID-19 pandemic for two consecutive years, Prime Minister Datuk Seri Ismail Sabri Yaakob said today.

He said the pandemic had also impacted the global economy, which contracted by 3.2 per cent in 2020 compared with a 2.8 per cent growth in 2019.

"Malaysia also has not been spared from the effects of the pandemic. Looking back at the achievements during the 11th Malaysia Plan (11MP) period from 2016 to 2020, the Gross Domestic Product (GDP) grew by an average of 2.7 per cent per annum, which was below the original target," he said in his speech when tabling the the 12th Malaysia Plan (12MP) 2021-2025 in Parliament today.

On the effect on the government's financial position, he said in 2020, the fiscal deficit widened to 6.2 per cent of GDP while the government's statutory debt stood at 57.9 per cent of GDP.

The eight assistance and economic stimulus packages implemented starting March 27 had successfully stabilised the country's economy, he said, adding that the GDP rebounded by 16.1 per cent in the second quarter of 2021 after four consecutive quarters of contraction.

The packages are valued at more than RM530 billion.

"God willing, we expect the government's financial position will improve in 2023 when the economy becomes stronger," he said, citing the fifth verse of the Quran's Surah Al-Insyirah, "Verily, after hardship, there will be relief."

He said that in the 11MP, the government had spent RM248.5 billion for development, of which 58 per cent was expenses for the economic sector, 28 per cent social expenses, 11 per cent security and defence expenses, and five per cent general administrative expenses.

For the economic sector, the largest expenditure was for the provision of infrastructure and basic utilities. Of this, 46 per cent was distributed among six states that required a stronger focus, namely, Kedah, Kelantan, Perlis, Sabah, Sarawak dan Terengganu.

"I understand that Keluarga Malaysia places high hopes on the government to address the health and economic crises. The government has received many suggestions from the public, Members of Parliament and state governments," he said.

Nonetheless, due to the significant need to safeguard lives and livelihoods in 2020 and 2021, he said there was very limited room to implement development projects.

"The situation is expected to continue until next year. Therefore, the government's development allocation will focus on continuation of projects," the Prime Minister added.

-- BERNAMA