Malaysia: Govt stands ready to provide further fiscal support – Zafrul

  • Finance Minister Tengku Zafrul Aziz reiterated that the government stands ready to provide additional fiscal support should there be a need in order to preserve the well-being of the people and businesses as well as strengthen the country’s healthcare system, while minimising scarring to the wider economy.
  • For 2021 alone, the government has announced four assistance packages with MYR26.8bn in fiscal injections.
  • Consequently, he said, the deficit was expected to increase from 5.4% of the Gross Domestic Product (GDP), as targeted in Budget 2021, to around 6.5-7% of GDP, with statutory debt expected to hit the ceiling of 60% by end-2021.
  • In total, there have been eight stimulus and assistance packages since the onset of the pandemic.
  • “Should the need arise again, we will provide fiscal support through a combination of cost rationalisation, additional dividends from the government’s ecosystem as well as increasing the debt ceiling to 65% in order to facilitate more borrowings,” he said.
  • He assured that as the crisis subsided in the longer term, the government would resume its path of fiscal consolidation guided by the Medium-Term Fiscal Framework and supported by the gradual implementation of the Medium-Term Revenue Strategy, which aims to improve the country’s revenue base.
  • He said, the government was studying efforts to strengthen the healthcare system’s resiliency and preparedness for future pandemics while meeting the longer-term challenges of an ageing population and non-communicable diseases.

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