Opposition Leader Lim Kit Siang has sought answers from Prime Minister Abdullah Ahmad Badawi on the wide discrepancy in the allocation of development funds for 2008.

It has been reported that there is a RM8.1 billion difference in the development funds for 2008 between the finance minister's budget speech last week and the Finance Ministry's Economic Report.

"There can be no justification for such a huge difference in the two sets of figures as the Finance Ministry's Economic Report signed off by Abdullah as finance minister on the very same day as the budget presentation," said Lim.

"A difference of RM8.1 billion would have sent the whole budgetary estimates awry, with the estimated budget deficit for 2008 estimated at 3.1% of the GDP (gross domestic product) shooting up to 4.6%."

The Finance Ministry said yesterday that the 3.1% target was based on an estimated development spending of US$40 billion for 2008 and not on a development allocation of RM48 billion announced in last Friday's Budget.

"Having these two different numbers is not contradictory and does not in any way imply that the deficit target of 3.1% will not be met," it said in a statement.

Deficit highest in SEA

According to Reuters, the ministry said the RM40 billion estimate for 2008 was consistent with the country's five-year development plan ceiling of RM200 billion, or RM40 billion a year.

"The government is committed to progressively reduce the fiscal deficit."

Malaysia's deficit as a share of GDP is the biggest in Southeast Asia.

International rating agencies said this week that Malaysia must cut the deficit aggressively to boost its sovereign rating - where better ratings allow a country to borrow more cheaply abroad.

Malaysia tried to get its credit ratings lifted this year at meetings with Moody's and Standard and Poor's in New York and Japan but neither agency agreed.

Both expressed satisfaction at the general tone of the economy but reservations over government finances, which has been spending more than it earns in the past 10 years.

The government had earlier said that it would balance its budget by 2005. However, the deficit had dropped from 5.5% in 2000 to 3.3% in 2006, and no new date has been set on achieving the target of a balance budget.