Malaysian Prime Minister Najib Razak is counting on domestic demand to shore up a cooling economy as global growth falters, pledging to boost consumption, spur private investment and accelerate selected public infrastructure projects next year.
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Without naming names, Najib said it was unfortunate that a few of the attacks were coming from people whom he did not expect.
More positively, it predicted economic growth of 4.0 to 5.0 per cent next year – barely changed from the 4.5-5.0 per cent forecast for this year – and a lower budget deficit, which would support investment grade ratings for Malaysia’s sovereign debt.
Despite the daunting challenges of the uncertain global economic situation, the Prime Minister said, Malaysia, in reality, was not a failed or bankrupt nation, but one which was stable with strong economic fundamentals and had remained competitive.
Towards that goal, Mr Najib announced more funds for education and modernising the farm sector, and assigned zero tax rates to basic items such as over-the-counter drugs, baby milk formula and noodles, effectively exempting them from the highly unpopular Goods and Services Tax (GST) introduced last April.
Commenting on the tepid origination activity in the bond market, the firm noted that it continues to believe that a more liquid secondary market is needed to reduce liquidity risk premiums, which would in turn encourage issuers of bonds rated A and below to enter the primary market. “A fund management unit can also be set up to manage the fund and be monitored by government institutions with a proven track record such as Khazanah Nasional Berhad”, it suggested.
“The government has continued its focus on the targeted groups through its budget, not only those in the’ bottom 40 group but the medium 40′ as well”, he said.
Funding for the Domestic Investment Strategic Fund, a fund to help a few Malaysia-owned companies compete in high value-added industries, said AffinHwang Capital.
Women, Family and Community Development: a 100 percent cut in resources for HPV vaccination and mammogram programmes for the two deadliest diseases among women – breast cancer and cervical cancer – after already suffering a 90 percent cut a year ago.
“They can’t give a good input on the national income and the expenditure that was tabled, maybe because they lack in funds to go prepare a thorough budget model”, he said.
The government aims to bring the deficit down to 3.1% of GDP in 2016 and maintain a growth rate of 5%-6% in the five years through 2020.
The Federation of Malaysian Manufacturers is asking the government to extend the reinvestment allowance, strictly enforce the “buy made-in-Malaysia” policy for government procurements and implement trade facilitation measures to help promote export competitiveness and expansion, local media reports.
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He stressed that Budget 2016 will demonstrate how the plan of the Government will improve the lives of all Malaysians. Malaysia’s once globally esteemed financial institutions are now in question, and 1MDB is involved in almost every part of the Malaysian economy, including energy, agriculture, tourism and real estate.
