KUALA LUMPUR: The government has asserted the importance of increasing the debt ceiling to 65 per cent of gross domestic product (GDP) to have a wiggle room to finance the government's budget deficit in the medium term, including funding needs for the implementation of the 12th Malaysia Plan (12MP).
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said although the government's debt ceiling was raised to 65 per cent, what was more important was the government's ability to repay the loan.
"If we were to pull the break too fast, where we suddenly don't want to spend or make an expansionary fiscal policy, our economy can't recover faster than we expected.
"So, the government's important responsibility is to ensure that its financial position remains stable so that it is ready and able to implement counter-cyclical measures in the event of a crisis," he said in a special interview themed "Budget 2022 From Rakyat to Rakyat" on Bernama TV and Astro Awani tonight.
Tengku Zafrul said the government's revenue projections were not enough for 2022 to fund all the programmes that were announced in the budget yesterday, especially for large projects.
Hence, the government will have a 6.0 per cent deficit based on a GDP growth of between 5.5 per cent and 6.5 per cent next year.
"This is more than this year's deficit, which is expected to be 6.5 percent, but because our GDP is expected to improve next year, so it helps reduce the deficit rate even though we have an expansionary fiscal policy with a total allocation of RM332.1 billion.
"So this 6.0 per cent is about RM100 billion deficit that we have to pay through debt. Alhamdulillah, we have the ability to borrow next year," he said.
Tengku Zafrul said during the tabling of Budget 2021, the government expected this year to be a year of recovery, however, the budget was drafted before the production of COVID-19 vaccines and the existence of new variants such as Delta.
"So, we cannot assume that this situation cannot happen. We must always expect it and we must have Plan B."
To this end, Tengku Zafrul said on Oct 11, the Dewan Rakyat approved an increase in the limit of the COVID-19 Fund from RM65 billion to RM110 billion, an increase in the statutory debt ceiling of the Federal Government from 60 per cent to 65 per cent of GDP.
With this approval, he said the government has had a wiggle room to borrow more and spend more to help the people, protect the well-being of the people and ensure business continuity.
On the main challenges in preparing Budget 2022, Tengku Zafrul said the main challenge was to prepare a budget that could meet the needs of various parties, especially when the government had spent a lot of money to help the people and businesses pull through the trying times since last year.
At more than RM332.1 billion, Budget 2022 will be the nation's largest, surpassing the RM321 billion expected to be spent this year, with a focus on reviving every socio-economic segment of the country.
The budget themed "Keluarga Malaysia, Makmur Sejahtera" (A Prosperous Malaysian Family) comprises RM233.5 billion operating expenditure, RM75.6 billion development expenditure and RM23 billion for the COVID-19 Fund.
-- BERNAMA
Bernama
Sat Oct 30 2021
Tengku Zafrul said the government has asserted the importance of increasing the debt ceiling to 65 per cent of GDP to have a wiggle room to finance the government's budget deficit in the medium term, including funding needs for 12MP. - Facebook photo
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.
NFOF will be operational in November 2024 with funding of RM1 bil
PM Anwar Ibrahim said NFOF will support venture capital fund managers to invest in startup companies with RM300 million set aside for 2025.