by REUTERS / pic by BERNAMA

KUALA LUMPUR – Malaysian Finance Minister Lim Guan Eng (picture) on Friday unveiled an expanded budget and wider fiscal deficit targets for 2019 as the government recognised previously off-book items amid efforts to deal with shrinking revenue and a large debt pile.

The government also on Friday released its fiscal outlook and annual economic reports.

Following are some highlights from Lim’s speech and the reports:

BUDGET

• Proposed budget stands at RM314.6b, a rise of 8.3% from 2018
• 2019 revenue collection to rise 10.6% to RM261.8b
• Fiscal deficit projected at 3.4% of GDP for 2019, 3.0% for 2020, 2.8% for 2021
• RM259.8b for operating expenditure, RM54.7b for development
• Revenue boosted by RM30b one-off special dividend from Petronas
• A Fiscal Responsibility Act will be tabled in 2021 to help control spending and debt
• Allocation of RM29b for public health services, RM60.2b for education
• Proposed Airport Real Estate Investment Trust (REIT), the first in the world, aimed at raising RM4b from REIT equity sales
• Minimum wage to be raised to RM1,100 monthly by Jan. 1

TAXES

• Government to leverage its assets and review all tax structures to increase revenue
• Service tax to be imposed on user-imported online services by 2020
• Excise duty of 40 sen per litre on sugary beverages, to help combat obesity
• Exit levies of up to RM40 for travellers going abroad

HANDOUTS AND SUBSIDIES

• Allocation of RM5b in cash aid for low-income households
• RM2b set aside for RON95 petrol subsidies
• Increase in electricity subsidies for low-income households

MACRO ECONOMY

• Malaysia 2019 GDP forecast at 4.9% growth, 4.8% seen for 2018
• 2019 inflation forecast at 2.5-3.5%, and 1.5-2.5% in 2018
• Exports seen growing 4.4% this year, then slowing to 3.9 % in 2019
• Current account surplus seen at RM38.6b for 2018, narrowing to RM34b in 2019

(Reporting by Kuala Lumpur Bureau; Editing by Simon Cameron-Moore)