CONCLUSION
While there are no overwhelming positives or negatives in the recalibrated budget, the above measures will ensure that the earlier forecasted GDP growth of 4-4.5% can be attained, and the fiscal deficit and national debt level is within the target of 3.1% and 55% of GDP, respectively. On monetary policy, the recent announcement by Bank Negara Malaysia (BNM) on a reduction in statutory reserve requirement (SRR) from 4% to 3.5% also ensure that there is sufficient liquidity in the financial system. While Rakyat-centric actions to address the cost of living issue and to boost domestic consumption were commended, economic measures to shield against challenging macroeconomic conditions and driving private sector performance are equally important under such circumstances. The government must also be more committed to being prudent in its operating expenditures without compromising the quality in its service delivery.
Although the Government has reiterated that the Malaysian economy is not in recession, the recalibrated budget did not touch on the long term strategy should there be a prolonged decline in oil prices and tougher external headwinds. Earlier Goldman Sachs and Morgan Stanley have cut their oil price outlook to as low as USD10 a barrel, although noted that USD30-USD35 range would be prevailing. As a conclusion, senior officials from the Ministry of Finance has not ruled out the possibility of another round of budget revision should oil prices fall below USD25 per barrel.
