Budget 2019 to set economic tone beyond next fiscal year, World Bank says

Budget 2019 to set economic tone beyond next fiscal year, World Bank says

KUALA LUMPUR,. The 2019 Budget will set the tone for the country’s economic environment beyond the next fiscal year, said the World Bank Group.

Lead Economist in Macroeconomics, Trade and Investment Richard Record said the budget, to be tabled on Nov 2, was expected to unveil the government’s fiscal policy and direction, as well as, measures to balance the twin challenges of fiscal consolidation, namely growth and debt.

“It will be an important chance to send the signal to investors and the private sector about the reform and growth opportunities that Malaysia has,” he told reporters during a briefing on the East Asia and Pacific Economic Update here today.

According to the World Bank report, Malaysia’s economy growth is expected to moderate to 4.9 per cent, 4.7 per cent and 4.6 per cent in 2018, 2019 and 2020, respectively, from 5.9 per cent last year.

It said the forecast was on the back of slower export and trade outlook, as well as lower public investment and consumption due to the cancellation of several large infrastructure projects.

The World Bank said private consumption would remain strong this year, while the external sector would continue to benefit from the rebound in global investment and manufacturing activities, although this cycle was beginning to mature.

However, it said achieving the fiscal deficit target of 2.8 per cent of gross domestic product (GDP) would be subjected to the economy growing above five per cent.

“Otherwise, the government may elect to run a slightly larger fiscal deficit,” it added. — Bernama