AGENDA
- Economic prospects for 2017
- 2017 Budget
- Federal revenue - Where does the money come from?
- Federal spending - Where does the money go to?
- Key measures and implications
- Conclusion
CONCLUSION
- Broadly, the tax incentives, measures and initiatives announced in the 2017 Budget are expected to have a moderate positive impact on the economy and capital market over the medium-term.
- Growth prospects remain positive yet challenging. The Ministry of Finance’s forecast of real GDP growth of 4.0-5.0% for 2017 appears on the high side, 4.0-4.5% is a more realistic target (2016E:4.0-4.5%).
- Risks to outlook could come from lingering external uncertainties (financial market volatility induced by higher US interest rate, unresolved issues related to Brexit, China’s economic rebalancing) as well as the strength of domestic demand.
- Effective implementation of the Budget’s programs and projects are crucial.
- Higher allocation with poor spending efficiency in terms of wastage and leakages, and worse still, mismanagement of public funds and corruption, the intended fiscal multiplier impact will be muted.
- So, it is not about how much money is allocated and spent, but how well the allocated money is spent.
- The biggest winners are bottom 40 households and 1.6m civil servants.
- Sector winners are SME, tourism, agriculture, construction, auto and consumer. The telecommunication sector is the key loser.
