Economists positive on Malaysian govt expansionary budget

15 October, 2019 12:00 AM printer

KUALA LUMPUR: Economists said Monday that they expect Malaysian government’s recent expansionary budget to remain supportive of the country’s economy.

Public Investment Bank Research said in its report that it sees the Budget 2020 as growth-centric with sufficient measures to impact the economy positively, enhanced job creation and structural reform, while at the same time not harming the government’s commitment to restoring fiscal health in the medium term, reports Xinhua.

“While consumers are seemingly lacking confidence and businesses appearing reluctant in committing to investment decisions, the government has stepped in with a slightly expansionary budget,” said the research house, adding that the budget appears to be balanced, with no punitive measures on corporates announced.

Hong Leong Investment Bank Research also applauded the budget as there were more income boosters and initiatives to attract foreign direct investments and domestic investments.

The research house opined that the government’s fiscal deficit target of -3.2 percent of gross domestic product (GDP) next year is achievable, as government managed the pace of spending, consistent with the needs and pace of the domestic economy.

Affin Hwang Capital also highlighted that the recent budget will remain supportive of the country’s domestic demand, especially with numerous expenditure measures that will bolster private consumption and investment.

“Responsibility and prudence seem to be the order of the day with the focus tilted very much towards pump-priming consumption spending,” said the research house.

RHB Research Institute also deemed the budget a relatively market-friendly budget that was broadly in line with its expectations and free of unpleasant surprises.

“It was a people-centric budget that contained multiple proposals to address issues affecting the B40 (low income group) segment, in addition to initiatives to pump-prime the economy via the construction sector,” said the research house, adding that it is also encouraged by wide-ranging proposals to kick-start labour reform.