Malaysian finance minister to present grim budget to parliament on Friday
Malaysia’s finance ministry will announce its budget planor 2019 today. This comes after the ruling Pakatan Harapan coalition projected that the economy will not realise a balanced budget by 2020.
Credit ratings, pensions and gratuities will be most affected by these measures, which could ultimately shift the economy’s reliance from public to private industry. These changes reflect the Pakatan government’s reaction to reduced government revenue incurred by a year of unpaid taxes and a debt-to-GDP ratio of 80%, compared to the globally accepted ratio of 55%.
Finance Minister Lim Guan Eng is expected to raise and broaden taxes on widely consumed goods, such as sugar and digital access. Such changes will test the tenets of economic restructuring pushed by PM Mahathir’s government, including fixing overspending on federal public services and addressing development imbalances in different regions of the country. Expect the business community to resent the anticipated tax hikes and for people to criticise the government if its promised subsidies on products like petrol are removed due to its currently limited ability to spend.
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