Malaysias deficit will rise to RM59 billion, predicts Anwar

Opposition leader Datuk Seri Anwar Ibrahim told Parliament that the Malaysia’s 2014 budget deficit will likely continue to balloon beyond Government projections, saying that this was the yearly trend under Finance Minister Datuk Seri Najib Razak’s administration.

This, said the Permatang Pauh MP while debating the Budget 2014 today, was because the Government projected spending and actual spendings has in the past several years has had an average underestimation of 7%.

“This means that the national deficit level for 2014 will increase to RM59 billion. There is a huge possibility that the deficit will soar beyond the predicted 3.5% of GDP for 2014,” said Anwar, reading out his speech.

Anwar questioned if the figures for projections for 2014 should be believed as “everytime” estimations are made, the actual spendings would exceed them and the Government need to table supplementary supply bills.

He estimated that every operations expenditure for 2014 will increase by at least 10%, that is RM22 billion, resulting in a total operation expenditure to the tune of RM240 billion.

Anwar said according to the Finance Ministry’s data based on its yearly Economic Report, it was clear that the operating expenditure have been increasing yearly since 2010 (Though this year it is expected to grow at the slowest pace.)

In 2010, the operating expenditure was RM 151.6 billion, RM 182.6 billion in 2011, RM 205.5billion in 2012 and RM 216.2 billion for 2013.

“The average growth rate for each year is RM22 billion which is 13%,” he said.

On the other hand, development expenditure has been dropping consistently on an annual basis since 2010.

It was RM51.3 billion in 2010, RM45.3 billion in 2011, RM44.3 billion in 2012 and a predicted RM45.1 billion for 2013. This was, he said, a average decrease of RM2 billion (5%) each year.

All this, he said, was on top of a supplementary supply of two times a year since 2009.

“The rate of yearly government spending of 9% is also worrying when the economy is only growing at 4-5% a year. In other words, the rate of spending is overcoming the economic growth and this would bring the Nation to a graver condition,” he said.