‘Balanced budget 2020 is still the target’
BernamaPublished: Jan 22, 2015 10:00 AM | Updated: Jan 22, 2015 11:47 AM
The government continues to be committed to achieving a balanced budget by 2020, says Prime Minister Najib Abdul Razak.
But the reality is we may not achieve three percent fiscal deficit in 2015.
The government continues to be committed to achieving a balanced budget by 2020, says Prime Minister Najib Abdul Razak.
"A balanced Budget 2020 is still our goal, and we will try our best to achieve the target," said Najib on the TV3 programme 'Soal-Jawab' last night.
He said the nation's fiscal deficit is projected to be on a downward trend from 3.5 percent in 2014 to 3.2 percent in 2015, and the decision has been made for a reality check on the target, he said on the programme hosted by Charon Mokhzani.
"We have to accept the reality that we might not achieve three percent, that's why I announced a new target of 3.2 per cent.
"But what is important is the downward trend from 3.5 percent to 3.2 percent, and even if we cannot achieve our original projection, if we look at it in the long term, our goal is to achieve a balanced budget by 2020," he said.
A check by Bernama found the country's fiscal deficit has been progressively reduced from 6.7 percent of gross domestic product (GDP) in 2009 to 4.5 percent in 2012, four percent in 2013, and 3.5 percent last year.
In tabling Budget 2015 in October last year, Najib, who is also
finance minister, said the government planned to reduce the budget deficit to 3.0 percent of GDP this year, but the slump in global crude oil prices has derailed the plan.
A federal government with no debts
He also spoke of the responsibility of his administration and the current generation to future generations in lowering the fiscal deficit in order to achieve a balanced budget by 2020.
"We don't want Malaysians to inherit a federal government that is saddled with debts," he had said in his Budget presentation.
To Charon's question on what the government can do to ameliorate the effects of falling oil prices, Najib said the current situation, though not a crisis for the country, necessitates modification measures.
"We need to make adjustments to the nation's budget through fiscal and micro measures so that the effects of the oil price slump can be mitigated and so that our growth rate can still be said to be good or encouraging.
"Most importantly, our efforts to safeguard the people's well-being can continue," he said.
Najib also stressed that there will be no change to the allocation for national development.
"The national development allocation of about RM48.5 billion will be maintained, we are not reducing it at all.
"What we will do is to adjust the operating expenditure, which we will reduce by RM5.5 billion to make up for the revenue shortfall," he said.
Making savings
Najib said the government has been able to make savings by no longer needing to provide petrol and diesel subsidies, although the country is still in a deficit situation and needs to cut down on operating expenditure.
"We still face a deficit of about RM8.3 billion, for which we will make up through the measures I stated earlier, reducing the OE (operating expenditure) and enhancing the nation's revenues through the measures and strategies I announced yesterday.
"I cannot deny that the oil sector is still a strategic sector for the country, but we have reduced our dependence on it.
"We have seen that our economy today is more diversified, and this diversity is one of our strengths," he said.
- Bernama
"A balanced Budget 2020 is still our goal, and we will try our best to achieve the target," said Najib on the TV3 programme 'Soal-Jawab' last night.
He said the nation's fiscal deficit is projected to be on a downward trend from 3.5 percent in 2014 to 3.2 percent in 2015, and the decision has been made for a reality check on the target, he said on the programme hosted by Charon Mokhzani.
"We have to accept the reality that we might not achieve three percent, that's why I announced a new target of 3.2 per cent."But what is important is the downward trend from 3.5 percent to 3.2 percent, and even if we cannot achieve our original projection, if we look at it in the long term, our goal is to achieve a balanced budget by 2020," he said.
A check by Bernama found the country's fiscal deficit has been progressively reduced from 6.7 percent of gross domestic product (GDP) in 2009 to 4.5 percent in 2012, four percent in 2013, and 3.5 percent last year.
In tabling Budget 2015 in October last year, Najib, who is also
finance minister, said the government planned to reduce the budget deficit to 3.0 percent of GDP this year, but the slump in global crude oil prices has derailed the plan.
A federal government with no debts
He also spoke of the responsibility of his administration and the current generation to future generations in lowering the fiscal deficit in order to achieve a balanced budget by 2020.
"We don't want Malaysians to inherit a federal government that is saddled with debts," he had said in his Budget presentation.
To Charon's question on what the government can do to ameliorate the effects of falling oil prices, Najib said the current situation, though not a crisis for the country, necessitates modification measures."We need to make adjustments to the nation's budget through fiscal and micro measures so that the effects of the oil price slump can be mitigated and so that our growth rate can still be said to be good or encouraging.
"Most importantly, our efforts to safeguard the people's well-being can continue," he said.
Najib also stressed that there will be no change to the allocation for national development.
"The national development allocation of about RM48.5 billion will be maintained, we are not reducing it at all.
"What we will do is to adjust the operating expenditure, which we will reduce by RM5.5 billion to make up for the revenue shortfall," he said.
Making savings
Najib said the government has been able to make savings by no longer needing to provide petrol and diesel subsidies, although the country is still in a deficit situation and needs to cut down on operating expenditure.
"We still face a deficit of about RM8.3 billion, for which we will make up through the measures I stated earlier, reducing the OE (operating expenditure) and enhancing the nation's revenues through the measures and strategies I announced yesterday."I cannot deny that the oil sector is still a strategic sector for the country, but we have reduced our dependence on it.
"We have seen that our economy today is more diversified, and this diversity is one of our strengths," he said.
- Bernama
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