the government today said it will be able to rein in the country's budget deficit and will announce a "caring budget" for the benefit of the people.

Second Finance Minister Nor Mohamed Yakcop said the government was confident of achieving a budget deficit of 3.8 percent of Gross Domestic Product (GDP) for 2005.

"We are very confident that we will achieve it (3.8 percent), no problem," he was quoted as saying by Bernama news agency.

Nor Mohamed declined to disclose measures to achieve the target. "Wait for the announcement of budget." The government is scheduled to unveil the budget on Sept 30.

"This is a caring government and the budget will be a caring budget," he said.

Analysts have warned that recent measures to weather the impact of rising oil prices could add further pressure on already strained government finances.

Malaysia last week announced a series of measures including capping fuel prices and road toll charges in an effort to contain inflation and keep economic growth on track in the face of rising fuel prices worldwide.

The budget deficit ran at 4.3 percent of GDP in 2004.