The budget could be an expansionary budget to ensure the public’s economic wellbeing while achieving the goal of shared prosperity
by MARK RAO/ pic by RAZAK GHAZALI
MALAYSIA needs a national budget that could help the nation brave the current trade uncertainties and global growth concerns while spurring the domestic economy.
Khazanah Nasional Bhd MD Datuk Shahril Ridza Ridzuan said the US-China trade war remains unresolved, creating a challenging and volatile global macro-environment for everyone.
“It is against that backdrop that the Malaysian economy has been growing resiliently so far. We hope that the coming budget will give more directions in terms of being able to keep pushing the Malaysian economy forward,” he said at the closing of Khazanah’s Megatrends Forum in Kuala Lumpur yesterday.
The head at the state-owned investment fund said while the trade war remains a structural issue for markets to contend with, the rerouting of the global supply chain provides Malaysia the opportunity to compete for new businesses and investments.
The challenging external environment, moderating global growth and protracted trade uncertainties could prompt the government to introduce initiatives and economic stimulus to bolster the domestic economy against external shocks.
Finance Minister Lim Guan Eng has already hinted that the federal budget allocation for 2020 could be an expansionary budget to ensure the public’s economic wellbeing while achieving the goal of shared prosperity. However, any expansionary policy will have to be weighed against Malaysia’s challenging fiscal position, having inherited over RM1 trillion in debts from the previous ruling government.
The government will need to spend more to boost the country’s economic growth.
Malaysia’s Budget 2020, which will be tabled this Friday, will be closely watched by the public, investing community and market players.
Investors are keen to see how the government would respond to the economic challenges.
Traders will be zooming in on the country’s fiscal deficit and planned development expenditure.
The US and China prolonged trade war has skinned the global economic growth, trimmed economic activities in many countries and put the world on a thin ice.
Washington and Beijing continue to trade tariff threats as analysts do not expect a speedy resolution.
Lim was scheduled to deliver a closing address of the event, but had to cancel as his ministry prepares for the 2020 budget.
Shahril Ridza said the forum, which entered its 15th edition this year, has always been a key event in Malaysia’s corporate calendar.
“It sets the scene for policymaking and policy thinking for a lot of our participants,” he said.
The Megatrends Forum is essentially a platform to gather Malaysian corporate leaders, policymakers, think tanks and practitioners from both the public and private sectors.